Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

PRIVATE BUSINESS

GREATER LONDON COUNCIL (GENERAL POWERS) BILL (By Order)

Order for Second Reading read.

To be read a second time upon Thursday next.

ST. PAUL'S PLAYING FIELD (TRUST) BILL (By order)

Order for Second Reading read.

To be read a Second time upon Thursday next at Seven o'clock.

Oral Answers to Questions — NATIONAL FINANCE

Retirement Age (Men)

Mr. Greville Janner: asked the Chancellor of the Exchequer whether he will introduce tax incentives to induce men to retire at 60 years of age if they wish.

The Financial Secretary to the Treasury (Mr. Robert Sheldon): My right hon. Friend has no plans to introduce into the tax system such general incentives.

Mr. Janner: In spite of that unsatisfactory answer, I congratulate the Minister and his right hon. Friends on being present in the House not only to present the Budget but to implement it with support from both sides of the House. When the Government consider their Budget, either alone or in conjunction with anybody else, will they consider whether, at this time of high unemployment among young people, a way could be found of helping men aged over 60 who are ailing and desperate to retire to be able to do so? Will the Government

bear in mind that my hon. Friend the Member for Preston, North (Mr. Atkins) and I have now collected a million signatures on our petition asking for voluntary retirement for men at the age of 60?

Mr. Sheldon: I thank my hon. and learned Friend for his support. I hope that it is as widespread as he claims. On the need for old people to make way for younger ones, I remind my hon. Friend that the job release scheme goes some way in that direction.

Sir John Hall: In view of the forecast that there will be an increasing number of retired persons, and more young people undergoing full-time education, thereby increasing the burden that will fall on a diminishing number of workers, will the Minister exercise caution before encouraging people to retire too early?

Mr. Sheldon: The House fully understands the general point that in normal times we need all the active work from all sections of the community that we can obtain. This would be diminished if we promoted schemes for early retirement more generally, and that is a consideration that the Government must always bear in mind.

Mr. Hoyle: Does my right hon. Friend agree that in considering such matters his Department and the Chancellor would be better served if they consulted people such as myself who have an alternative economic strategy to present, rather than consulting the hon. Member for Cornwall, North (Mr. Pardoe), which could lead only to disaster? Will the Minister meet with us more, because I am sure that a better policy would result from such meetings?

Mr. Sheldon: I can assure my hon. Friend that I should be more than delighted to consult him and that there is an open door into my office on any day of the week. I have always held the view that the greatest possible amount of consultation is the most effective way to good legislation, and that remains my view.

Mr. Paul Dean: Does the Minister agree that flexible retirement arrangements—which do not always mean early retirement—should be encouraged where-ever possible? Will he ensure that no


obstacle is put in the way of an employer who wishes to introduce arrangements similar to those now being introduced for the mineworkers?

Mr. Sheldon: I am sure that the flexible retirement schemes that so many firms undertake are in the interests of both employers and employees, and it is for them to come to their own arrangements about what best suits the particular industry in which they both have a part to play.

Sir G. Howe: Is the Minister aware that the Chancellor is due to celebrate his sixtieth birthday on 30th August this year? While I am sure that the whole House will join me in wishing the Chancellor a long and happy life, is the Minister aware that we intend so to arrange things that the Chancellor will need no fiscal inducement to lay down his heavy burden well before that date?

Mr. Sheldon: I can assure the House that when the Chancellor's sixtieth birthday arrives he will be in harness, working for the good of the Government and of the people.

Mr. Speaker: Order. I ought to have declared an interest in this Question.

"Accountancy Age"

Mrs. Wise: asked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.

Mr. Rooker: asked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.

Mr. Andrew F. Bennett: asked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.

Dr. McDonald: asked the Chancellor of the Exchequer how many copies of "Accountancy Age" are taken by his Department.

The Chief Secretary to the Treasury (Mr. Joel Barnett): One.

Mrs. Wise: Has my right hon. Friend read that one copy, and has he observed the account of the incredibly complex

price-fixing agreement between the sugar refiners and the equally complex price equalisation scheme operated by the Government? While no blame apparently attaches to Tate and Lyle, is my right hon. Friend satisfied that, with all these complexities, the taxpayer's interest is being adequately safeguarded in assessing taxes and subsidies for the sugar refiners?

Mr. Barnett: I read the article about Tate and Lyle, and the Comptroller and Auditor General has reported on the case. If the Public Accounts Committee decides to report upon it to the House, I am sure that hon. Members will want to take that opportunity to discuss the matter further.

Mr. Rooker: Is it not significant that this large private enterprise company, one of the most virulent anti-nationalisation companies in the country with its Mr. Cube campaign, is only too happy to take great handouts from the State when the occasion arises so that shareholders' funds can benefit, in this case to the tune of £600 million?

Mr. Barnett: I not only read the edition of "Accountancy Age" to which my hon. Friends have referred but the following week's edition, which withdrew everything that had been said the previous week. I appreciate the point made by my hon. Friend, and it is right that the taxpayer's interest should be carefully taken into account. I am sure that the Comptroller and Auditor General has done that in his report. If the PAC decides to submit the matter to the House, we shall have an opportunity to study it further.

Mr. Bennett: Will my right hon. Friend consider trying to persuade Tate and Lyle to put a simple statement of the firm's financial position on its bags of sugar so that consumers can see what is going on?

Mr. Barnett: That is an interesting suggestion. I am sure that the board of Tate and Lyle will have noted it, and I hope that it will take account of it.

Dr. McDonald: Can my right hon. Friend explain to the House who bore the cost of restocking the nation's stockpile of sugar following the loans to the sugar companies, particularly Tate and Lyle? Does he agree that there are still


grounds for disquiet owing to the complexity of Tate and Lyle's accounting procedures and the complexity of the issues involved? Will he ensure that, in future, Tate and Lyle presents its accounts in a simple, straightforward way in order to make clear to everyone the extent to which the firm relies on Government support?

Mr. Barnett: The presentation of public companies' accounts fascinates me every bit as much as it does my hon. Friends. I should like to see such accounts presented more simply, but at the moment there is much consideration of presenting them in, if anything, a more complex way. However, I am sure that they will be crystal clear to my hon. Friend however they are presented. On the question of who benefits, I should remind the House that some of the major beneficiaries were the developing countries, for which we ensured very generous prices.

Mr. Ridley: I declare an interest. Is it not appalling that Labour Members should indulge in accusations of guilt by association when the PAC has dismissed all the charges mentioned in this publication and The Times has categorically denied its own misleading report on the subject? Will the right hon. Gentleman deny the sort of implications that his hon. Friends are making?

Mr. Barnett: I do not propose to deny or support anything until I see the report of the PAC. That is the sensible way for the House to deal with this matter. I note the hon. Gentleman's views about guilt by association.

Mr. Pardoe: Would the right hon. Gentleman care to take this opportunity to advise companies such as Tate and Lyle which may fear nationalisation that, as long as this Parliament lasts and the agreement between the Government and the Liberal Party continues, there is no fear of any nationalisation?

Mr. Russell Kerr: Well spoken, comrade.

Mr. Barnett: I note the hon. Gentleman's views, and I am always happy to consult him on this and other matters.

Mr. Adley: On a point of order, Mr. Speaker. Is it your intention in future,

despite the Questions on the Order Paper, to call five Government supporters and only one supporter of this side of the House?

Mr. Speaker: The hon. Gentleman has a short memory. Last week the same thing happened in reverse. I try to be as fair as I can, and I called two hon. Members from the Opposition Benches to put supplementary questions.

Commuter Rail Fares

Mr. Channon: asked the Chancellor of the Exchequer if, in framing his forthcoming Budget, he will take into consideration the increasing cost of rail fares and the need to give some assistance to rail commuters; if he will study the tax relief that is provided in other countries; and if he will make a statement.

Mr. Robert Sheldon: I am aware of the considerations to which the hon. Member draws attention, but I do not think that it would be right to single out this particular form of personal expenditure for tax relief.

Mr. Channon: Is the right hon. Gentleman aware that fares have risen much faster than earnings or the cost of living generally and that this has caused considerable hardship for hundreds of thousands of people? Is he further aware that there is now ample evidence that the railways are losing a great deal of revenue as a result of this? There are schemes of this sort in many other European countries. Therefore, should not the Government at least make a proper examination of this proposal so that its full costs can be ascertained, bearing in mind that if they do not do so the railways will continue to lose revenue from this source and the hardship for many people will continue?

Mr. Sheldon: I am aware of the hon. Gentleman's general point. It has been put to the Government from time to time. However, where a person lives is largely a question of personal choice and it would be wrong to expect one taxpayer to subsidise another for living in a particular area. These are matters for election by the person concerned. That is the way that all Governments have so considered they should remain.

Mr. Arthur Lewis: Is my right hon. Friend aware that there are people, with


other incomes, who are getting a tax-free allowance equivalent to as much as £100 per day gross and also receiving tax-free travel allowances—which even hon. Members do not receive? Why should their Lordships be so favourably treated? Why are they allowed to get away with it while other workers by hand and brain are not? There are peers drawing an allowance which is equivalent to £100 a day gross as well as getting tax-free travel allowances.

Mr. Sheldon: I am aware of the point that my hon. Friend makes. The allowances for Members of the House of Lords are designed to cover their expenses. Those who hold directorships or who work in industry will be covered by the general tax laws, and recent legislation on benefits in kind will apply equally to them.

Mr. McCrindle: Will the right hon. Gentleman consider allowing employers who wish to do so to issue vouchers to assist their employees to travel to and from work and to allow the total cost to be offset against corporation tax, as can be done to a limited extent with luncheon vouchers?

Mr. Sheldon: Luncheon vouchers have always been in an anomalous position, and it is not intended to extend that sort of anomaly. This is a large element of discretionary expenditure and it would be wrong to complicate the tax laws to allow for it.

Mr. Noble: While it may be true that where a person lives is a matter of personal choice, is my right hon. Friend aware that it is no longer a matter of personal choice for many people where they work and that they are having to travel increasing distances because of factory closures? While there is a need to look at fares, does my right hon. Friend agree that subsidising rail but not bus fares through tax cuts or any other means would be grossly unfair to many people living in areas outside the big conurbations? Will he look at the possibility of increasing subsidies to bus undertakings?

Mr. Sheldon: My hon. Friend has rightly drawn attention to the problem of public transport. He will be aware of the considerable subsidies that are paid towards public transport. Any further elements of public expenditure must be

considered in the light of our survey of public expenditure as a whole and will form part of the further investigation that is necessary before next year.

Mr. Stanbrook: Does the Minister agree that he is entirely wrong to attribute the expense of transport to work to the discretionary side of a person's activities? Is he aware that there are many other allowable expenses that are wholly, necessarily and exclusively incurred in the process of earning an income? Does not this fall within that discretion?

Mr. Sheldon: It has always been held to be difficult to assess how much of this type of expenditure is incurred on the basis of a person's own personal choice. If one made certain parts of this type of travel allowable for tax reductions, one would disturb decisions to which a person rightly comes when choosing where he wishes to reside.

Mr. Ovenden: Does my right hon. Friend detect an element of hypocrisy in the attitude of the Opposition, since they are continually calling for cuts in subsidies, including rail subsidies, while at the same time weeping crocodile tears over the fate of commuters and continuously trying to make political capital out of their suffering?

Mr. Sheldon: I am grateful to my hon. Friend for drawing attention to the chasm that exists between the Opposition's obsession with cuts in public expenditure in general and increases in certain types of public expenditure.

Mr. Burden: Although the Minister has said that this is a difficult matter, does he agree that in the last few days the Government have shown that if they put their mind to do things that at first appear difficult they are able to resolve the difficulty? Is he aware that many people in commuting areas suffer extreme hardship because of increased fares and increases in other costs such as housing? Does he agree that it is time that something was done for these deserving people, who are in the present situation principally because of the enormous cost of living imposed upon them by the Government?

Mr. Sheldon: I am grateful to the hon. Member for reminding the House that the Government have been able to


resolve a number of difficulties facing the country as a whole. I look forward to the Government resolving with equal effect other economic problems that we hope to overcome as a result of certain measures.

Mrs. Bain: As regards personal choice, is the Minister aware that many people have to live in places where houses are available, particularly in view of the Government's policy of dispersing people from the inner cities to the suburbs and new towns? Will he put pressure on the Secretary of State for Transport to encourage the freezing or reduction of fares in the public transport sector in order to encourage the further use of public transport and to cut costs for commuters?

Mr. Sheldon: I take note of what the hon. Lady has said, and I hope that as a result she will be more sympathetic to the Government's problems on public expenditure than she has been during recent debates. These are problems that the Government must resolve. The general type of resolution that we have seen is an indication of our determination to fit the problem within the framework of our overall economic strategy.

Mr. Channon: On a point of order, Mr. Speaker. In view of the unsatisfactory nature of the reply, I beg to give notice that I shall seek an early opportunity to raise the matter on the Adjournment.

Tax Codings (Widows)

Mrs. Chalker: asked the Chancellor of the Exchequer if he will instruct the Inland Revenue to check the 1977–78 tax codings for widows with children.

Mr. Robert Sheldon: I assume that the hon. Lady is concerned about the adjustments relating to child benefits. All inspectors in charge of tax offices were reminded on 4th March of the need to see that the existing instructions have been correctly carried out.

Mrs. Chalker: I am grateful for that reply, but is the Financial Secretary aware that there is still a chaotic muddle in the minds of many people whose tax advice was sent out before 4th March and where errors have been made over the reduction of child tax allowance at the

time of the introduction of child benefits? Will he ensure that when the second reduction is made—if it is made—in child tax allowance next autumn, the tax codings that go out, particularly to widows, are unequivocal and tell them exactly what their financial situation will be for the following year?

Mr. Sheldon: About 5½ million code changes were involved and reminders have been sent by the Inland Revenue. It has ensured that all reasonable steps have been taken to ensure that widows receive their correct code numbers before 6th April. The instructions have been sent and there will be little difficulty. The operation has been complex. By the time we come to the next change, we shall have had experience and that should remove the problems that arose on the first occasion.

Mr. R. C. Mitchell: Is my right hon. Friend aware that a widow, or a family, with a child over 19 years of age who is still at school does not qualify for the child benefit allowance but has the child tax allowance reduced anyway? Does he agree that they are net losers? What is he going to do about it? He said that only a few people are involved, but there are 3,500 such people in the country. What is he going to do about them?

Mr. Sheldon: There have been some changes in the educational grants. We must understand that in the change-over from child allowances to child benefits there are a number of transitional problems with which we have had to deal. In the main, we have dealt with them satisfactorily.

Mr. Beith: Is the right hon. Gentleman aware that it is deeply distressing to the widows involved to receive £1 child benefit for their child and then to find that that sum is taken away from their pension? Is he aware that they then have to haggle with the Inland Revenue to ensure that they are not taxed on the money that they have never received, and that that causes deep personal distress?

Mr. Sheldon: I must remind the hon. Member—[HON. MEMBERS: "Your hon. Friend."] The House will know that all of us, irrespective of party, have friends situated in all sections of the House. I remind hon. Members that the new child


benefit scheme comes into operation on 6th April. No one is out of pocket at the moment and no one can be out of pocket until the scheme starts its operation. I hope to try to ensure that nobody will be under any misunderstanding about the Government's intention, and instructions have been sent out to that effect.

Mr. David Howell: Is not the whole story of the child benefit scheme a dismal tale of incompetence, of which this is just one more aspect? Does not the Minister recognise that to those with children over the age of 19 in full-time education it is not good enough to say that something will be done later, because they will have to pay a revised scale in the new academic year? Does he agree that this is yet another area where a higher standard of competence and efficiency is required?

Mr. Sheldon: I understand that the hon. Member is not opposed to the change from tax allowances to cash support for mothers. We have not had notable support for this important change, which has immense social consequences. The change has been valuable and it will be seen to be valuable. During the transitional stage I hope that we shall be able to carry the House with us until the final stages, when support to a mother for her child will be regarded as a normal arrangement.

Taxation and Benefits

Mr. George Cunningham: asked the Chancellor of the Exchequer if he will set in hand an examination of the proposal on tax and short-term social security benefit set out in the article by the hon. Member for Islington, South and Finsbury in The Guardian of 8th March.

Mr. Joel Barnett: I am having this scheme examined and I will write to my hon. Friend shortly.

Mr. Cunningham: Does the Chief Secretary agree that we would not be justified in taxing short-term benefits because it would probably cost about £50 million a year to administer that change, but will he also agree that we cannot go on with a system that pays very large tax rebates to some people becoming unemployed but nothing at all to others, dependent entirely upon the moment at which they become unemployed? Will Treasury Ministers try to draft the Ways and Means Resolutions

on the Budget in such a way that we stand a chance of having a good going over of this idea this year with a view to possible implementation next year?

Mr. Barnett: As my hon. Friend knows, we always draft the Ways and Means Resolutions in as helpful a way as possible. I take my hon. Friend's point. There are serious administrative problems in this field, although in principle two incomes, one in work and one out of work, of equal amounts should be taxed equally. There is nothing wrong in principle with the taxing of short-term benefits. It is right, in my view, that they should be taxed. However, on the other hand, there are very serious administrative problems, to which my hon. Friend referred in his article, and I promise him that we shall be considering them.

Sir G. Howe: Is the Chief Secretary aware that there may be some room for doubt as to quite whom he is intending to help in the drafting of the Ways and Means Resolutions, but that this is a matter on which there is equal concern on both sides of the House? Will he confirm the figure quoted by his hon. Friend that the total sums now paid out in tax refunds to people in receipt of short-term benefits amount to some £400 million? Will he also consider very seriously the suggestion put forward by his hon. Friend that, at least while people are drawing benefit and are not paying tax, they should be included in the tax code system and, therefore, not entitled to refunds for those relevant weeks?
Will the Chief Secretary accept our assurance that any move to follow the suggestions made by his hon. Friend to bring back some justice in this area would be much supported by the Opposition?

Mr. Barnett: I very much support bringing justice into this area and many others. I want to examine very carefully what was said by my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham). There are very great administrative problems in dealing with this question through the PAYE system. We are talking about the equivalent of about 10 million additional jobs, because about half of short-term benefits are subject to claims and are for up to about two weeks, on average. That means


an enormous administrative task. I assure the right hon. and learned Gentleman that these are very serious administrative problems and that we are looking at them.

Sir G. Howe: Does not the right hon. Gentleman understand? Of course, one can say that it is an administrative task to repay tax or to tax those who are drawing benefits of this kind, but is it not the case that every one of these people involves an administrative operation simply to secure the payment of a refund already? Would it not make sense, therefore, to take the same administration to see that they get no refund? What is the difference?

Mr. Barnett: The difference is that the reasons for refunds are much more complex than the right hon. and learned Gentleman suggests. There are many other reasons for refunds. If the matter were as simple as that, I am sure that the Government of which he was a member would have looked into it and dealt with it. It is a much more complex matter than he cares to suggest.

Public Expenditure

Mr. Frank Allaun: asked the Chancellor of the Exchequer if he will state the approximate cost in 1977–78 of restoring the cuts since February 1976 in housing, education, health and overseas aid, respectively; what estimate he makes of the effect of such restoration on the total number unemployed; and if he will consider giving priority to this in his Budget.

The Chancellor of the Exchequer (Mr. Denis Healey): The programme tables in Part 2 of Cmnd. 6721 show changes from Cmnd. 6393. The aggregate saving was about £375 million. To restore this sum would mean increasing the basic rate of income tax by ¾p or increasing indirect taxes sufficiently to raise the RPI about ½per cent. The possible employment effects of any increases in individual programmes from the levels announced in Cmnd. 6721 would depend on how such increases were spent within the programmes concerned. My hon. Friend will have to await my Budget Statement for an answer to the last part of his Question.

Mr. Allaun: Will the Chancellor give more attention to the letter from the

National Executive Committee of the Labour Party on this matter—

Mr. Pardoe: Hear, hear.

Mr. Allaun: —than to any views that may come from a certain Liberal gentleman? Secondly, while I welcome tax reliefs for the lower paid, if, as now suddenly and astonishingly appears to be the case, the Chancellor is in a position to give away large sums, is it not only fair that a good part of this should go to helping those who need homes, home helps and nursery schools, and who are being so seriously hit by the recent cuts?

Mr. Healey: I shall give immensely careful attention to any communication that I receive from the NEC of the Labour Party—quite as close attention as I would give to representations made to me by the hon. Member for Cornwall, North (Mr. Pardoe).
On the question of a possible improvement in the prospect for the public sector borrowing requirement, my hon. Friend will recognise that, if such an improvement proves to eventuate, it will be due to an improvement in the exchange rate and a fall in interest rates, which is consequential on the steps I took to cut public expenditure last year.

Mr. Emery: As the rate of personal income tax arises on this Question, will the Chancellor—if not today, in his Budget Statement next week—state categorically by what date the present Government will reduce the level of personal tax to that which existed in 1973–74?

Mr. Healey: I shall bear in mind the point made by the hon. Gentleman, as I shall all the 2,379 other points that have been made to me for inclusion in my Budget Statement.

Miners (Early Retirement Scheme)

Mr. Ridley: asked the Chancellor of the Exchequer whether the lump sum payments to early-retired mineworkers which the National Coal Board has contracted to pay are chargeable to income tax.

Mr. Joel Barnett: Under the Finance Act 1970, superannuation schemes require the approval of the Board of Inland Revenue in order to qualify for the tax treatment which it provides. The


Act provides for the payment within limits of lump sum benefits which will be exempt from tax, but questions relating to a particular scheme are a matter between the administrators of the scheme and the Board of Inland Revenue.

Mr. Ridley: Is the Chief Secretary aware, however, that the Financial Secretary told me, in answer to a Question, that where the employee had a contractual right to the payment it would be taxable? Is he saying that the miners do not have a contractual right to this payment? If that is the case, I would accept that it is not taxable. Does he not feel that there would be a strike if there was a failure to make this payment—in which case it is clearly taxable? Does the social contract therefore provide that trade unionists should be treated differently for taxation purposes from the rest of us?

Mr. Barnett: No, it does not. If Opposition Members take that kind of tone in relation to lump sum benefits for miners who have worked underground for a very long time, it is very fortunate that they are not in Government at present.

Mr. Skinner: Does my right hon. Friend appreciate that there are those in the mining industry who believe that the lump sum payment that is made under the early retirement scheme is not large enough and that it should be equal to that which is paid under the miners' redundancy payment scheme? Does it not make a significant contrast with the note issue made by GEC, in which Sir Arnold Weinstock himself pocketed £600,000 and avoided paying tax at the highest rate and might pay it at 35 per cent.? As compared with this small lump sum payment for miners who have worked underground for 40 or 50 years, does not my hon. Friend think that it is that which needs examining and not this payment for miners?

Mr. Barnett: I certainly agree with my hon. Friend that there are double standards on the Opposition Benches. I would not necessarily agree with him about the early retirement scheme. It is a good scheme and I think that it has been accepted as such by the NUM.

Mr. David Howell: No one questions the hard work of miners, but the Minister

has a very serious question to answer from my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley)—namely, whether he can reassure us that treatment for tax for payments of this kind is the same for all workers.

Mr. Barnett: I can reassure the hon. Gentleman. I told him in my original answer that the schemes have to be approved by the Inland Revenue, and if they are approved the payments will he tax-free.

Mr. Ridley: On a point of order, Mr. Speaker. In view of the thoroughly unsatisfactory and evasive nature of the reply, I beg to give notice that I shall seek to raise the matter on the Adjournment at the earliest possible opportunity.

Building Contractors (Tax Exemption Certificates)

Mr. Cope: asked the Chancellor of the Exchequer if he will postpone the start of the requirement for a new 714 certificate at least until the Inland Revenue has dealt with the applications.

Mr. Robert Sheldon: No, Sir. The great majority of applications have been dealt with, and I have made special transitional arrangements to deal with the rest.

Mr. Cope: Will the right hon. Gentleman acknowledge that the shambles that exists over the issue of 714 certificates goes much wider than the labour-only sub-contractors to whom they were originally intended to apply? Will he admit that there are local authorities that are refusing the right to tender to contractors who do not hold such a certificate? Does that attitude have the right hon. Gentleman's support?

Mr. Sheldon: I must take issue with the hon. Gentleman in his description of the introduction of the scheme. The scheme replaces the Conservative-introduced scheme, which had the same objectives. We have introduced a scheme that will work. It is necessary to understand that the 714 certificates are a means of ensuring that those who are required to pay tax in fact pay tax on the earnings they make.

Mr. Terry Walker: Does my right hon. Friend understand that there seems to be


some local difficulty at the Bristol (6) tax office? Will he look into the difficulty as a matter of urgency?

Mr. Sheldon: I shall be happy to look into any case that my hon. Friend may wish to put to me.

Mr. Tebbit: Does the right hon. Gentleman recognise that, while we all support the aim of ending tax dodging in this respect, a key part of the proposal was the issue of plastic cards, including the photograph of the sub-contractor concerned, to ensure that there was no possibility of fiddling? However, because of the muddle in the right hon. Gentleman's Department, he has now instructed contractors that they may accept a letter without any photograph or any proof of identity. What was all the fuss about in the first place?

Mr. Sheldon: The hon. Gentleman may know that the letter is to deal only with applications that come at the tail end of 18 months' preparation. It is designed to cover only the period up to 5th July. This has been made crystal clear. I am glad to have the hon. Gentleman's support for the photographs, which a number of his hon. Friends opposed when they were first announced.

Sir G. Howe: Does the right hon. Gentleman understand that there is no doubt about the need to have some effective method of collecting tax from people wherever and however they work but that the scheme is causing administrative chaos throughout the industry? Is he aware that it is causing many sub-contractors to lose their livelihoods altogether? It is causing many main contractors to lose those who would otherwise be working for them. Does the right hon. Gentleman appreciate that these difficulties stem from the detailed and restrictive conditions attached to the scheme? Will he give the House the assurance that the Government will reconsider the entire operation of the scheme before they bring the Finance Bill before the House?

Mr. Sheldon: This is a matter that has been before the House for the past two years. The legislation was passed by the House 18 months ago. Certificate application forms were put in at that time. There has been plenty of time for the introduction and understanding of

the scheme. We are now dealing with the 5,000 applications awaiting the Inland Revenue. It may be that some more will come into the tax offices at the last minute. The arrangements that I have announced are designed to meet only the late applications.

Widows (Taxation)

Mr. Ovenden: asked the Chancellor of the Exchequer what recent representations he has received concerning the taxation of widows; and what replies he has given.

Mr. Robert Sheldon: Many representations have been received about the taxation of widows, from hon. Members, from widow's organisations and from others. Naturally, my right hon. Friend has given them careful consideration in preparing his Budget. The Government's view remains that increases in widows' pensions are a more effective way of helping all widows than providing special tax reliefs.

Mr. Ovenden: Has my right hon. Friend seen Early-Day Motion No. 245, signed by 83 hon. Members from all parts of the House, which demonstrates the concern that is felt about widows' taxation? Will he ask my right hon. Friend the Chancellor, when drawing up the Budget, to bear in mind the deep and justified sense of grievance that national insurance widows feel about the tax burden that they bear compared with married women and war widows?

Mr. Sheldon: I understand the sense of concern that everyone feels for those whose lives have been shattered by widowhood. This is a matter that must always be present in the minds of all of us, but there is the problem of widows' pensions. If we were to produce tax allowances to assist them, more money would be made available to those who have most. That is the way the tax system works. We believe that the right way to approach the matter is through the social security scheme, which is expressly designed to give most to those who have the greatest need. That is the way in which we should make moneys available to those in the greatest need as described by my hon. Friend.

Mr. Ralph Howell: I realise that the Minister cannot divulge any of the Budget


proposals, but I remind him of the letter that I have sent from my constituency concerning a widow with total earnings of £28 a week who has been taxed at £5 a week, leaving her with less spending power than if she were on social security. Will the Chancellor bear in mind the urgent necessity of raising all tax thresholds well above the social security level?

Mr. Sheldon: I understand the hon. Gentleman's point about levels of tax thresholds. This is obviously a matter that my right hon. Friend will have at the forefront of his mind in the Budget Statement that he will be making next week.

Oral Answers to Questions — GRAVESEND

Mr. Ovenden: asked the Prime Minister if he will pay an official visit to Gravesend.

The Prime Minister (Mr. James Callaghan): I have at present no plans to do so.

Mr. Ovenden: If my right hon. Friend is unable to visit my constituency, will he consider suggesting to the Leader of the Opposition that she pays yet another visit? Is he aware that in Gravesend we have a large immigrant population and a successful community relations council which is supported by all parties? Is my right hon. Friend aware that Conservative supporters in my constituency are concerned that they are now led by a person who has refused to dissociate herself from the racialist campaign being conducted by the Conservative candidate in the Stechford by-election?

The Prime Minister: I am glad that it is an all-party campaign in Gravesend. I have noted that the Conservative Party, perhaps even more especially when in Government, has taken a responsible attitude to matters of immigration and race relations. I was glad that the Home Secretary appointed David Lane as the chairman of one of these bodies. It was drawn to my attention that the Conservative candidate at Stechford had certainly gone beyond what is Conservative Party policy, and I hope that a dissociation from that may be made.

Mrs. Thatcher: Is the Prime Minister aware that, as this matter was raised last

Tuesday and I was not aware of the basic leaflet to which it referred—a leaflet published some seven months ago—I naturally did not rise? I have seen it, and our policy remains—I am in some difficulty because in theory I am not allowed to quote from documents in asking a question but perhaps I may refresh my memory plentifully—that
We believe that we will only succeed in maintaining and securing tolerance for all minority groups in this country by holding out the clear prospect of an end to immigration.
That is official policy. Is the right hon. Gentleman aware that the leaflet referred to
the interests of good race relations in the future
and finished by stating
What do Labour say?
We know what the former Chief Whip of the Labour Party, the right hon. Member for Bermondsey (Mr. Mellish), says about immigration, but what does the Prime Minister say?

Mr. Faulds: Do you disavow it? Answer a simple question.

The Prime Minister: I was endeavouring to make it possible for the right hon. Lady to make a positive statement on immigration and race relations. The policy of ending all immigration would clearly be inhuman and has not been Conservative policy. The ending of all immigration would mean that no dependants and no wives could join those who are in this country. I hope that the right hon. Lady will reflect on the matter, because that is not the policy enunciated in her own document.

Oral Answers to Questions — UNITED STATES AND CANADA (PRIME MINISTER'S VISIT)

Mr. Dykes: asked the Prime Minister if he discussed EEC matters during his recent visit to President Carter.

The Prime Minister: I refer the hon. Member to the statement which I made to the House on 15th March.

Mr. Dykes: There may have been more to it than that. Did the President of the United States express any interest in the British political scene—for example, the nature of the Liberal Party and its ideas on the EEC, or was that


whole subject too squalid for the President, with his religious upbringing, to deal with? So far as the President may have discussed the EEC with the right hon. Gentleman, did he think that it would be possible for the Prime Minister to introduce with sufficient courage a Bill on direct elections at the earliest possible opportunity, on which the Prime Minister might just be able to secure a majority of more than 24?

The Prime Minister: Yes, the President evinced a lively interest in the British political scene. He was extremely well informed about it, and I did my best to add to his knowledge. The Bill on direct elections will be introduced in due course, as I announced yesterday.

Mr. Gould: Has my right hon. Friend seen reports that the Tory Group in the European Assembly has recommended a 25 per cent. devaluation of the green pound, which would add 8 per cent. to food prices? Does he not agree that that would be very damaging to our interests? Does it not confirm that the Conservative Party is now clearly the party of Common Market-imposed high and rising food prices?

The Prime Minister: It is, of course, true that a substantial devaluation of the green pound would add heavily to our price increases in this country. I am not aware of the figures that my hon. Friend gave, but certainly there has been an official statement that the Conservative Party spokesman is in favour of a substantial devaluation of the green pound. That is bound to put up prices: it cannot be denied that it will do so. That is why we have so far resisted giving away the green pound. I would only want to see a devaluation there if we got value for money in another direction.

Mr. David Steel: On any future visit to the United States, will the right hon. Gentleman make any attempt to explain how it is that, in the Conservative Party's view, any talks between them and ourselves with a view to sustaining a Conservative Government so as to provide a stable programme is the height of patriotism while similar talks to support a Labour Government in a stable programme are a "squalid deal"?

The Prime Minister: We know that patriotism always exudes from the Conservative

Party when it is in office but sometimes fades rather when its members go abroad when in Opposition.

Mr. Emery: When the Prime Minister is considering the subject of the green pound, will he bear in mind the necessity for a successful British agriculture, which rests very much on some devaluation of the green pound?

The Prime Minister: The question of a devaluation of the green pound should not become a matter of theology: it is a question of practicality. The Government would not want to see a situation in which there was total inflexibility on this matter if we got something worth while elsewhere. The whole of the CAP is based on certain national interests. I think that our national interests have been very much pushed into second place since we are such a large consuming, and not so much of a producing, country. We want to see a very healthy agriculture, and will do so, but I want to see us get value somewhere else if there is to be any change in the value of the green pound.

Mr. Wrigglesworth: Has my right hon. Friend noticed that a Conservative Member in the European Parliament yesterday attacked the Commission for stopping or attempting to stop the sale of cheap butter to Russia? Does he not agree that to take that attitude is to go against the interests of both the consumer and the taxpayer in this country?

The Prime Minister: The agricultural policy of the Community was devised before Britain became a member and is not in Britain's interests as it stands. We have, by our entry, thrown a considerable influence on the side of European consumers as a whole, and we shall continue to do so.

Mr. Maxwell-Hyslop: Did the right hon. Gentleman let President Carter into the secret that he has never shared with the House of Commons—namely, if he will not devalue the green pound, how he will put into agriculture the capital it needs to carry out the Government's own policy, as declared in "Food From Our Own Resources"?

The Prime Minister: I am grateful to the hon. Gentleman for reminding me what the original Question was about, because it enables me to say that I did


not discuss the green pound with President Carter. However, since the House is interested in the matter today, I assure the hon. Member that the success of British agriculture is very important and that the resources which are being put into it and have been put into it are sufficient to encourage growth—and that growth is coming. But what Conservative Members who support the CAP should ask themselves is whether they want to support a policy based on a social phenomenon in some of the Continental European countries but which does not meet the needs of the market or of the consumers in this country.

Mr. Prior: If the right hon. Gentleman thinks that the resources available to go into British agriculture are sufficient to increase food production, why is the present food production from British agriculture lower than it was even in 1970?

The Prime Minister: I am not sure whether the right hon. Gentleman visits the countryside, but when he does he will find that the production of milk, on certain farms at least, suffered heavily last year from a drought, which might also have escaped his notice.

Oral Answers to Questions — PRESS (ROYAL COMMISSION'S REPORT)

Mr. Moonman: asked the Prime Minister if he will make a statement on the proposed date of publication for the Royal Commission on the Press.

The Prime Minister: The Royal Commission hopes to present its final report by the middle of this year.

Mr. Moonman: I am sure my right hon. Friend will be aware that it is almost three years since the Royal Commission was set up. Since he now says that its report will be published quite soon, will he not also anticipate that any recommendations which could be implemented arising from the Annan Report should await that publication, since there are many relevant matters in both reports?

The Prime Minister: I shall want to give the report full consideration when it comes. I regret very much that a number of the recommendations in the interim report have not been implemented, and I hope that the industry

will get on with those. I shall also consider any inter-reaction between the Annan Report and the Royal Commission's Report.

Mr. Gow: In view of the partial report on yesterday's Cabinet meeting which appears in The Times today, in which it is reported that four Cabinet Ministers threatened to resign over the deal with the Liberals, should not the right hon. Gentleman place in the Library a record of what took place yesterday so that the House and the country can judge the extent to which the Liberal Party has betrayed its erstwhile supporters?

The Prime Minister: As the hon. Gentleman knows, there is no ministerial responsibility, thank God, for what appears in the Press. I would certainly advise the hon. Gentleman not to believe everything that he reads even in august newspapers like The Times.

Mr. Aitken: Would the right hon. Gentleman care to propose to the Royal Commission on the Press that there should be a merger between Labour Weekly and Liberal News? Is he aware that without one of those skilled deals Liberal News, like the Liberal Party, is likely soon to go broke from lack of support?

The Prime Minister: I hope that that is not so. I should not want to think that that was the first result of the understandings that we have reached. I am certainly willing to advise everybody to read Labour Weekly, which today contains an exclusive article by me.

Sir G. Howe: When considering that helpful suggestion by my hon. Friend the Member for Thanet, East (Mr. Aitken), would the Prime Minister like to consider taking on a more ambitious task and including Tribune in the merger?

The Prime Minister: I am a long and faithful reader of Tribune. That is more than I can say of my dealings with the Conservative newspapers, but if they would like to put me on their free circulation lists I shall even undertake to look at those week by week.

Mr. Molloy: Does the Prime Minister agree that these mergers might provide an opportunity for decent-minded people to see a united front against the racialist element of the Conservative Party which


was condoned this afternoon by its Leader?

The Prime Minister: I am very anxious that there should be no unnecessary disagreements or lack of understanding about policy on this important social issue which can raise so much tension. I understand that the Conservatives' policy is that they do not want to stop immigration of dependants joining relatives already here. I trust that that is still the position.

Oral Answers to Questions — MR. SPEAKER (CALLING OF MEMBERS)

Mr. Rost: On a point of order, Mr. Speaker. It will not have escaped your observant eye that as from last night there has been a realignment of hon. Members of this House, between those supporting the Government and those supporting the Opposition. It is a well-established practice of the House that Mr. Speaker should maintain a fair balance, particularly at Question Time, between official supporters of the Government and opponents of the Government when calling on Members to speak.
I am not suggesting that there has been any imbalance in your choice since the realignment, but I am seeking your guidance on whether you have accepted in practice for the future that when Members from the Liberal Party are called, even though they prefer to sit on the Opposition Benches rather than join their new marriage partners, you take account of this fact—[Interruption.]

Mr. Speaker: Order. Another time, some of the hon. Members who are now shouting will be trying to make a point of order.

Mr. Rost: All I am seeking guidance about is that we should have clarification that in future, Mr. Speaker, you will take account of the time occupied by Liberal Members and realise that, even though they sit on the Opposition Benches, their time should not come out of that allocated to Members of the official Opposition.

Mr. Speaker: The hon. Member for Rutland and Stamford (Mr. Lewis) will not mind my telling the House that last night he gave me notice that he would raise exactly this point of order that has

now been raised by the hon. Member for Derbyshire, South-East (Mr. Rost). I am grateful when hon. Members give me notice in advance that they are raising a point of order. I know that that is not always possible, but it is helpful.
The answer is quite straightforward. For centuries this House has vested in its Speaker complete discretion about who captures his eye and when. Certainly this goes back to Speaker Onslow's time in the eighteenth century, and possibly before that. I propose that until or unless the House takes that discretion away from the Speaker I shall exercise it as fairly as I can.

BUSINESS OF THE HOUSE

Mrs. Thatcher: May I ask the Lord President to state the business for next week?

The Lord President of the Council and Leader of the House of Commons (Mr. Michael Foot): The business for next week will be as follows:
MONDAY 28TH MARCH—Conclusion of the debate on the Statement on the Defence Estimates.
Remaining stages of the General Rate (Public Utilities) Bill [Lords], and of the Marriage (Scotland) Bill [Lords].
Motion on ECC Dcuments Com.(76)660, S/102/77, R/616/77, S/232/77 and R/388/77 on fishery resources.
TUESDAY 29TH MARCH—My right hon. Friend the Chancellor of the Exchequer will open his Budget.
EEC Documents R/566/77 and R/567/77 on economic policy guidelines will be relevant.
At 7 o'clock the Chairman of Ways and Means has named opposed Private Business for consideration.
Proceedings on the Agricultural Holdings (Notices to Quit) Bill [Lords], and on the British Airways Board Bill [Lords], which are consolidation measures.
WEDNESDAY 30TH MARCH and THURSDAY 31ST MARCH—Continuation of the Budget debate.
At the end of Wednesday, debate on the Chairman of Ways and Means' ruling of 10th February.
FRIDAY 1ST APRIL—Private Members' motions.
MONDAY 4TH APRIL—Conclusion of the Debate on the Budget Statement.

Mrs. Thatcher: Will the Leader of the House tell us when the White Paper on direct elections will be published? As he knows, there is a debate on this subject tomorrow, and it would be helpful if we could have it by then. Is the White Paper already in print, and will it come through unchanged?

Mr. Foot: I am glad to assure the right hon. Lady on the second point—no alterations are required to the White Paper. It will be published next week, and I am sorry that it cannot be published in time for tomorrow's debate.

Mr. Spriggs: Has my right hon. Friend seen Early-Day Motion No. 257 headed "St. Helen's Trades Council"? Will he give the House an opportunity to debate that council's resolutions about a policy for ending rising unemployment, by introducing selective import controls, strict price controls and associated measures?

[That this House welcomes the St. Helens Trades Council resolution in which it is stated that the people of St. Helens, in order to stop rising unemployment, urge the Labour Government to implement the following policy, namely, the introduction of selective import controls; strict control over the prices of essential items in working class family budgets; lowering of interest rates and the control of export capital; raising of consumption by increasing pensions, social insurance benefits and Social public expenditure; a shorter working week; extension of statutory and annual holidays; the reduction and elimination of overtime and a fair basic wage for all; and which urges that the Labour Government honour its last election manifesto by implementing 'Clause 4' of the Labour Party constitution.]

Mr. Foot: I have seen the motion in the name of my hon. Friend the Member for St. Helens (Mr. Spriggs) and some of his hon. Friends. All the issues that he has mentioned will be relevant in the Budget debates which begin next week.

Mr. Peter Walker: Does the Leader of the House expect the statement from the Secretary of State for the Environment on the Government's inner city policies to be given to the House next week?

Mr. Foot: I do not know. I shall let the right hon. Gentleman know when I find out.

Mr. Arthur Lewis: Now that we have got over the immediate difficulty of last night, may I urge the Leader of the House seriously to have discussions next week with both political parties in order to stop this stupidity of having to drag in sick Members to vote? As every elector in the country has the right to a proxy vote if he or she is indisposed or sick, is it not possible to introduce the same system and to give sick hon. Members a vote by proxy? If the Prime Minister can make a deal with the Liberal Party, surely all parties can get together and announce next week that no sick Member will have to come into the House to vote if he does not want to and that the House will facilitate his voting by proxy?

Mr. Foot: I recognise that there is strong sympathy for this proposal in many parts of the House. The same question was raised some months ago when we had similar problems and anxieties. We did have some discussions between the usual channels then, but no real agreement was reached.

Mr. Arthur Lewis: Why not?

Mr. Foot: Although I have great sympathy with what my hon. Friend says, there are more problems associated with proxy voting than his question suggests.

Mr. Grylls: Will the Leader of the House make a statement next week or arrange for a debate on the new joint consultative committee of the Labour and Liberal Parties? What is the constitution of this committee, who are the members and will its minutes be published? We want to know what it is all about.

Mr. Foot: The matter was before the House for general debate yesterday and the House gave a substantial majority to the proposals presented to it. I am sure the hon. Member has taken that into account. All those who are concerned will be able to see what is happening, and I am glad that the hon. Member is hoping to see this experiment develop fruitfully.

Mr. Greville Janner: In view of tit:, fact that the Leicester city housing committee, along with other Tory-dominated housing committees throughout the country, is cutting council housing by 50 per cent., in spite of the fact that Leicester is a housing stress area, could we have


a debate on how we could have some control over local authorities' ability to destroy the rights of ordinary people to get homes?

Mr. Foot: I fully acknowledge the importance of that matter. I cannot promise a debate next week, but these questions will arise when we have a more general discussion of housing matters.

Mr. Michael Morris: As the orders relating to direct labour lapse on 31st March, will the right hon. Gentleman say what the Government intend to do about those orders and the proposed legislation on local authority work forces?

Mr. Foot: No doubt the hon. Gentleman heard the Prime Minister's statement yesterday. The Government propose to proceed with a Bill to assist in dealing with that problem. I cannot say exactly when that Bill will be introduced, but I hope that it will be fairly soon.

Mr. Watt: Will the Leader of the House say when the devolution Bill relating to Scotland is to be reintroduced—or should I ask somebody in the Liberal Party for an answer?

Mr. Foot: We shall be having discussions, as I indicated to the hon. Gentleman and representatives of his party, about how we proceed in dealing with this subject. The Government are determined to ensure that a Bill in some form or other is brought again before the House. Fortunately, because of the fact that the hon. Member for Banff (Mr. Watt) and his party were defeated in the Lobbies last night, the House will now have every opportunity to proceed on these lines.

Mr. Wrigglesworth: Is my right hon. Friend aware that some of us are appalled at the apparent ambivalence among the Opposition in their immigration policy as demonstrated this afternoon? Therefore, will he arrange an early debate on this subject so that we can discover whether the policies enunciated by the right hon. Member for Penrith and The Border (Mr. Whitelaw) and by his right hon. Friend the Member for Chesham and Amersham (Sir I. Gilmour) are the official Opposition policies, or whether the policies of the right hon. Lady the Leader of the Opposition are the official policies of the Opposition?

Mr. Foot: My hon. Friend has put the point in his remarks even more effectively than I could have put it in my reply. I am sure that the House will wait to hear the answer.

Mr. Marten: When the right hon. Gentleman replied to last night's debate he said that the agreement with the Liberals was not a Lib-Lab pact. Will he make a statement next week describing the difference between the two?

Mr. Foot: I would refer the hon. Gentleman to the whole of my speech. He will see there set out what I believe the agreement means. The words are perfectly simple. I am sure that the hon. Gentleman is as capable as anybody else of understanding that passage in my speech.

Mr. Michael Stewart: In view of the pleasure given to everybody by yesterday's proceedings and the desire among the Opposition for further information, may we have another censure debate soon, please?

Mr. Tebbit: May I thank the Lord President for his remarks a few moments ago underlining the perils of proxy voting in this House? May I also ask him to consider whether something more should be said on the subject of the expiry of orders under the Local Government Act 1972 which gives certain powers to 25 local authorities to use direct labour forces? May we have a statement next week making plain what will happen between the expiry of those orders and the enactment of whatever new measures the Government propose to bring forward?

Mr. Foot: I shall examine the most appropriate way to give that information to the hon. Gentleman and to the House. In reply to what was said by my right hon. Friend the Member for Fulham (Mr. Stewart) about motions of no confidence, that remedy does not lie in my hands. I shall exert all my influence on the right hon. Lady the Leader of the Opposition to ensure that that happens.

Mr. Robert Hughes: Is my right hon. Friend aware of the great concern in Aberdeen at the proposals to limit the number of fishing vessels in the Faröes fishing grounds? Will he undertake to


make a statement next week and to debate the whole issue of fishing?

Mr. Foot: I understand my hon. Friend's anxieties. These matters might be in order in Monday's debate, although I cannot be sure. I am sure that my hon. Friend will make inquiries on that point.

Mr. Carlisle: As long ago as 20th January the Lord President said that he hoped to have an early debate on broadcasting the proceedings of the House. When is that "early debate" likely to take place?

Mr. Foot: I cannot promise a debate next week, but I shall see that we have an opportunity to proceed on that matter. The Government wish to ensure that we move nearer to broadcasting the proceedings of the House.

Mr. Canavan: If I may revert to the remarks made by my right hon. Friend the Member for Fulham (Mr. Stewart), may we have an early debate on Early-Day Motion No. 259, which is a motion of no confidence in the Leader of the Opposition, bearing in mind the excessive sum in public expenditure, amounting to more than £13,500 per year, received by the right hon. Lady in salary for a job that she is clearly incapable of doing, as was amply demonstrated by her pathetic performance yesterday, resulting in the resounding defeat of her equally pathetic motion?

[That this House has no confidence in the Leader of Her Majesty's Opposition.]

Mr. Foot: It would be most ungallant of me to reply to that comment.

Mr. Spearing: Has my right hon. Friend noticed the notes on the Order Paper relating to the Joint Committee on Statutory Instruments relating to European Community documents? Is he aware that evidence given to the Joint Committee last Tuesday by the Foreign and Commonwealth Office is not available because it is not yet printed? In view of the circumstances, will he agree to postpone the matter to another occasion?

Mr. Foot: There is some difficulty involved in a postponement but I shall examine the point.

Several Hon. Members: rose—

Mr. Speaker: I wish to indicate that I propose from now on to call only those hon. Gentlemen who have tried to catch my eye so far during business questions.

Mr. Brocklebank-Fowler: Has the Lord President noted the continued progress of Early-Day Motion No. 222 which stands in my name and which has now received the support of 335 right hon. and hon. Gentlemen in all parts of the House? In those circumstances, noting the considerable support for a debate on the establishment of a Select Committee for Foreign Affairs, will the right hon. Gentleman now reverse his decision of a few weeks ago and give the House an early opportunity to debate this subject?

[That this House, dissatisfied with the infrequency and nature of debates on Foreign Affairs, urges the Government to set up a Standing Foreign Affairs Select Committee whose Reports should be debated in the House within 30 days of publication.]

Mr. Foot: I cannot promise a debate in the near future, because up to Easter the time of the House is pretty full. I cannot see any chance before Easter of having such a debate. I cannot promise that it will be debated at an early stage afterwards because we have some important business at that time, too. However, I do not rule out such a debate altogether. This proposal has been put forward on a number of occasions over many years. The Opposition might wish to raise the subject at some time. However, I know that they also would have some difficulty in fitting in this matter before Easter.

Mr. Molloy: Is my right hon. Friend aware that there is grave consternation among education authorities at all levels and on the part of those who are interested in education at the vulgar, cruel and appallingly biased film shown on BBC television this week? Because of the concern aroused by that film and the appalling lapse in standards on the part of the BBC, does not this matter merit a debate in the House?

Mr. Foot: I make no comment on the form of the film itself because I have not seen it. No doubt my hon. Friend's judgment is likely to be correct. However, it would be wrong for the Government to embark on any process of censorship of the BBC or any other channel.

Mr. Henderson: Will the right hon. Gentleman be in a position next week to make a statement on the pact or agreement with the unionist Labour wing of his own party, 40 of whom destroyed the progress on the devolution Bill on 22nd February since, without such a pact or agreement, that Bill has not a snowball's chance in hell of getting through the House?

Mr. Foot: It is perfectly true that we experienced some difficulties with some of my hon. Friends with regard to the guillotine, but we had very much more difficulty from the official Opposition, with whom the hon. Gentleman was associated so closely in the Division last night. I am sure that on reflection, in the sober morning, if I may put it that way, the hon. Gentleman is highly gratified that he lost last night, because we can live to have this Bill another day.

Mr. Rathbone: Will the Leader of the House, as the Leader of the whole House, state whether he is prepared to refer to Mr. Speaker the question of representation for the whole of the country at some time or is he prepared to refer only representation of Northern Ireland? Will the right hon. Gentleman say whether he will be prepared to make a statement?

Mr. Foot: I do not think there is any purpose in having such a general reference, but the Prime Minister and I announced last night that we would agree to the reference about Northern Ireland. We are certainly preparing a statement to be made on that subject.

Mrs. Thatcher: Are these both contained in the same rule or are the Government proposing to refer only a part of the rule to a Speaker's Conference?

Mr. Foot: Since the right hon. Lady has raised the matter in that form I shall certainly have another look at what I said, but my understanding is that it is perfectly possible for the question of representation of Northern Ireland to be referred to the Speaker's Conference. As indicated in the debates that we had on this matter a few weeks ago, the Government have taken the view that they do not believe that this is the moment to refer the whole general question to the Speaker's Conference.

Mr. Urwin: Can my right hon. Friend indicate how soon the Prime Minister

expects to receive the report, which he commissioned from the NEB two or three weeks ago, about the proposal for Plessey to shed 4,000 jobs in the telecommunications industry in areas of high unemployment such as Wearside and Merseyside? Can my right hon. Friend further guarantee that there will be a debate on the Floor of the House when the report is received, not only on this issue but also on the whole future of developments in the telecommunications industry?

Mr. Foot: I certainly accept that the matter is one of great importance. That is why the Prime Minister took action on the very day of the announcement. I am not sure how soon the report will be available but I shall see whether I can indicate to my hon. Friend when it will be available. When it is available I believe that there will have to be some discussion, or at any rate some means by which the matter is examined in the House.

Mr. Michael Latham: Is it not rather urgent for the Liberal Party to get on and redraft the direct labour Bill because after 31st March the orders will lapse and the local authorities engaging in that direct labour will be liable to surcharge?

Mr. Foot: I have already promised the hon. Member for Chingford (Mr. Tebbit) that I shall look at this and see whether it is desirable for a statement to be made on this subject. I do not think that the hon. Gentleman's question has added anything to what was said before.

Mr. Wiggin: May I draw the right hon. Gentleman's attention to Early-Day Motion No. 208 which stands in my name and the names of 129 hon. Members from all sides of the House concerning the reintroduction of the Seat Belts Bill?

[That this House, recognising the prospect of Government time being available in the near future, requests the reintroduction of the Road Traffic (Seat Belts) Bill, which received, in the last session of this Parliament, a second reading by a majority of one hundred and ten on a free vote, completed its committee stage, and which should prevent a thousand deaths and ten thousand injuries from road accidents each year.]

This is an urgent measure which has already received a Second Reading in this Parliament, and I believe the Government should now find time for it.

Mr. Foot: I fully understand that there are many hon. Members who attach great importance to that Bill, and it is true that the Bill received a Second Reading. That is known to the House, but it is also known that a number of hon. Members who strongly opposed the Bill were exercising their rights as well, and that fact has also to be taken into account.

Mr. Michael Marshall: Leaving aside the squalid deal which received a great deal of criticism on all sides of the House yesterday, may I ask the Leader of the House to regard as serious the question when the consultative committee's proceedings will be made known to the House? Does he agree that this is a pre-legislative scrutiny committee? Is not this an important question in the context of the study which is supposed to be in hand on how the House, through the Procedure Committee, will look at these matters in future? Have we not preempted this kind of development and will the Leader of the House give a serious answer to this important question?

Mr. Foot: I would be more encouraged to give the hon. Gentleman serious answers if he put his question in a

courteous manner. I do not expect to answer any hon. Gentleman who starts off in the manner in which the hon. Gentleman started. I do not think that there is any requirement on the Government to make a fresh statement on the matter but, of course, the discussions that take place are bound to have their influence on the way in which the House does its business. We are not doing anything that is outside the normal method of discussion on these matters, and I believe that it could be of benefit to the House as a whole in these circumstances.

Mr. Speaker: Mr. Stanbrook, last question.

Mr. Stanbrook: In view of the interest in the size of the queue of immigrant dependants waiting to enter this country, and the need to avoid the making of one-sided party political points on this delicate subject, will the Leader of the House please provide facilities for an early debate on the Franks Report on a register of dependants?

Mr. Foot: I cannot promise any early debate on the matter but certainly the House should have a chance of considering this matter. I think it is right that this question should be discussed in as calm a manner as possible. That is the way in which the Prime Minister replied to this question.

Orders of the Day — SOCIAL SECURITY (MISCELLANEOUS PROVISIONS) BILL

Lords amendments considered.

New Clause A

AMENDMENT OF REGULATIONS FOR CREDITING CONTRIBUTIONS

Lords amendment: No. 1, in page 3, line 23, at end insert new Clause A—
A. The power to amend regulations made before the passing of this Act under section 13(4) of the principal Act (crediting of contributions for the purpose of enabling contribution conditions to be satisfied) may be so exercised as to restrict the circumstances in which and the purposes for which a person is entitled to credits in respect of weeks before the coming into force of the amending regulations; but not so as to affect any benefit for a period before the coming into force of the amending regulations if it was claimed before 18th March 1977.

3.56 p.m.

The Minister for Social Security (Mr. Stanley Orme): I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Speaker: With this amendment we are to discuss Lords Amendments Nos. 14, 15 and 17.

Mr. Orme: These amendments are a very late addition to the Bill, but a very necessary one. As Baroness Young said in another place—I shall acknowledge the point that the right hon. Member for Wanstead and Woodford (Mr. Jenkin) will probably make to me—it would have been much better had the problem they are designed to solve been spotted much earlier, or indeed, never allowed to arise. As she also acknowledged, once the problem had been recognised for what it was, it would have been quite impossible to ignore it.
The purpose of the amendments is to avoid the unintended and very expensive effect of changes to the national insurance scheme since 1975 which would have enabled people to acquire contributory benefit rights although they have not paid contributions or received contributory benefit for many years. The problem

lies mainly in the credits regulations. The new clause will extend the existing power to make regulations on credits, so that we can restrict the use of credits given for 1975–76 and 1976–77 in establishing future benefit rights. We already have statutory powers to deal with credits awarded for later tax years.
I can set out the basic points fairly simply, although a great deal of complication lies behind the simple facts. Under the Social Security Act 1975, there are provisions enabling people not in work, because of sickness or unemployment, to be credited with contributions to maintain their contribution record for entitlement to contributory benefits. It was not realised at the time just how much further this went than the corresponding provisions before 1975. Nor was it realised that there would be a cumulative effect when the credits provisions operated together with other new or changing provisions—notably the new non-contributory incapacity benefits and the arrangements for phasing out the married woman's contribution option.
In brief, if a person had at some time—however remote—paid some contributions, incapacity or unemployment years later could lead to credits and thence to contributory benefit, without any intervening work record or continuing receipt of contributory benefit. As hon. Members will appreciate, it is hardly consistent with the principles of a contributory scheme to provide benefits where there is only a connection with contributions so tenuous that the beneficiary himself would be most unlikely to be aware of it. Arguments have been put for a scheme without contributions as such and therefore without contribution conditions. The right hon. Member for Wanstead and Woodford has put forward such a scheme at certain times.

Mr. Patrick Jenkin: I must correct the record. I have never put forward such a scheme. Indeed, when such a scheme was examined when I was at the Treasury the net cost was thought to be about £500 million if we were to transfer the test of entitlement to benefit from contributions to residence. Can the right hon. Gentleman tell us what the current cost would be? It must be double that, and probably more.

Mr. Orme: I am sorry if I misinterpreted something which I had read of what the right hon. Gentleman had said. I withdraw that if I am wrong. I do not have the figures for which the right hon. Gentleman asked, but I could obtain them for him. Certainly such a scheme would be very expensive indeed, but it can at least be rationally argued. What cannot be rationally argued is that when we have a contributory scheme we should incur additional expenditure, amounting to perhaps £100 million, in paying uncovenanted benefits to people it was never intended should qualify for contributory benefits. That would be totally irresponsible and would make it impossible to pay for priorities which have been deliberately chosen and agreed by Parliament. I hope that the House recognises that we are dealing in large sums of public expenditure which could go to much more deserving causes.
The remedy is to make regulations limiting the circumstances in which credits given under the new contribution system can count for benefit entitlement. The details as to the circumstances and the benefits involved are a matter for the regulations and are not dealt with in the new clause, which, as I have explained, is necessary to enable the regulations to restrict future benefit rights where these depend on credits given between 1975 and a current date, and so avoid letting in a large number of unwanted claims this May, when the post-1975 rules come fully into effect. But the House will wish to know that, using this clause and our existing powers under the main Act, our aim is to achieve a restriction consonant with our original intentions and with the contributory nature of the scheme, and more in line with the pre-1975 arrangements.
As the clause makes clear, we shall not be seeking to touch benefit claimed before 18th March for any period before the regulations bite. That sets the outer limit of the new provisions. Within that outer limit, we have it in mind to be rather more generous—both to avoid anything that looks like retrospection and to match as far as possible the pre-1975 arrangements. For example, credits given to someone getting contributory benefit will not be affected, nor will credits given in a year in which there is also a not

insignificant record of contributions actually paid.
In very few cases will the regulations or this clause disappoint expectations that have already been raised. As with any unintended loophole, some people have already used it or are on their way to using it, and we shall, within reason, recognise this fact. But the prime consideration must be, in fairness to contributors, as well as in the interests of responsible administration of the scheme, to close the loophole.
The related amendments flow naturally from the introduction of the new clause. Lords Amendment No. 14 provides that the regulations we shall be making under our powers as extended by the new clause need not be referred beforehand to the National Insurance Advisory Committee. Time is, I am afraid, too short for this. Lords Amendments Nos. 15 and 17 enable us to give effect to the new clause and to the exemption of the regulations from reference to the NIAC immediately the Bill receives Royal Assent. We shall be making the regulations as soon as we can after Royal Assent, and bringing them into effect at the earliest possible date.

Mr. Patrick Jenkin: We recognise, Mr. Speaker, that the three amendments which you have been kind enough to say should be taken with Amendment No.1 flow from it. They are consequential upon it, and it is certainly convenient to the Opposition that we should discuss them at the same time.
I am very glad that the Secretary of State has joined us at this stage, because some of the things I shall say will be somewhat critical of the way in which the matter has been handled, and it is right that he should listen. I must tell the Minister for Social Security that this is a very unsatisfactory business. In the light of that, it is not only the right but the duty of the Opposition to probe more deeply what lies behind what the right hon. Gentleman said.
We do not intend to oppose the Government in trying to put matters right. The right hon. Gentleman referred to the potential public expenditure consequence of the errors that have come to light and mentioned a figure of £100 million. I suspect that that is very much an outside estimate, but even if it were £10 million


it would probably be right to take steps to close an unintended loophole, if "loophole" is the right word for what we find here.
However, I am very unhappy about the way in which the matter has been dealt with and the way in which it is proposed to put it right. I shall explain why in a few minutes, but first I wish to say that I accept that under a contributory scheme contributions must be the basis of entitlement to benefits.
The right hon. Gentleman may have misread, misheard or conceivably even misunderstood something which he attributed to me. There is a case for abandoning the contributory principle and making the test of entitlement to benefit solely that of residence. The consequences would be considerable. I suggested that there might be a cost of about £1,000 million. I am glad to have the Under-Secretary of State's nod of assent that that is the right order of magnitude.
The attraction of such a scheme is the abandonment of the whole of the administration connected with the collection of contributions, their separate identification and the maintenance of contribution records and all that goes with it. But the cost would be considerable, and there would be considerable opposition from large numbers of the population who believe that entitlement to benefit could not be relied upon in the same way if it rested solely upon statutory entitlement as opposed to the contractual entitlement that goes with contributions.
When we examined the matter when we were in office as one way of achieving simplification the point was made that the trade union movement, for example, had always set great store by the contributory principle, believing—I suspect rightly—that where benefits are secured by contributions there is a much greater reluctance on the part of this House to interfere with entitlement than where they would rest solely upon statutory entitlement. After all, we took out from the Bill a clause to disentitle certain categories of occupational pensioner from receiving unemployment benefit mainly because we believed that it was a breach of the contributory principle and would have introduced a means test in the entitlement as of right flowing from the National Insurance Scheme. So I accept

that contributions must be a very important entitlement to benefits in a contributory scheme.
Secondly, the Opposition say that, where there are benefits of a comparable nature some of which are based on a contributions record and some of which are non-contributory, it is right and inevitable that the contributory benefits should be higher. Sometimes it is argued that, with the progressive introduction of noncontributory benefits such as the NCIP, the attendance allowance, the invalid care allowance, the mobility allowance and a whole range of other benefits, the contributory principle has been so undermined that it could be done away with. It is a point, though it is not one with which I agree. Where there are overlapping benefits, as with the invalidity pension and the NCIP, it is right that the contributory benefits should be higher than the non-contributory ones.
The third point which I accept, because it is an intergral part of the system, is that, when there is a brief interruption of contributions and a person is entitled to contributory benefits, it is sensible to operate a system of credits for the contributions during that period of interruption. The alternative would seem to be to pay a higher benefit but to require the beneficiary to pay back part of it in a continuing contribution. That might seem a logical paper transaction, but I can understand that, for people off sick or unemployed, the machinery necessary to collect contributions could be unduly cumbersome. It is more simple for the amounts to be held as automatic credits when a person is sick or unemployed.
Fourthly, I accept that there must be a limit upon the system of granting credits in these circumstances. There must be some point at which a person ceases to be regarded as a contributor to the National Insurance Scheme and becomes a dependant. If this were not so, it would blow a gaping hole in the system and in the entire contributory principle.
What the Minister told us and what his noble Friend in another place said was that the legislation as it now existed placed no such limitation on the extent of the credits for contributions paid while enjoying benefits and, perhaps more significantly in relation to this amendment, that there was no power now to make regulations to provide such a limitation.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): indicated assent.

Mr. Jenkin: I am glad to have the Under-Secretary's assent to that. What the Minister is now proposing is a new regulation giving him power to close this loophole.
I have indicated the extent to which the Opposition agree with the Government and accept what they say. It is at this point that our anxieties arise. Perhaps I may refer to what Lord Wells-Pestell said on 22nd March in another place when he spelt out clearly what the Government were doing. He said:
The extension of existing powers is needed if we are to avoid letting in a large number of unwanted claims from this coming May, when the post-1975 rules come fully into effect. But, as the clause itself makes clear, we shall not be seeking to touch benefit claimed"—
pausing there, I emphasise the word "claimed"—
before the 18th March for any period before the regulations bite. That sets the outer limit of the new provisions. Within that outer limit, we in fact have it in mind to be rather more generous, both to avoid anything that looks like retrospection and to match so far as possible the pre-1975 arrangements. For example, credits given while in receipt of contributory benefit will not be affected."—[Official Report, House of Lords, 22nd March 1977; Vol. 381, c. 395.]
4.15 p.m.
What the Government are doing here is, first, to amend legislation by regulation. That in itself has always been regarded as undesirable. It was the subject of an important recommendation of the Donoughmore Committee in 1932, and I am sure that the Secretary of State will recall our debates on the Health Services Bill when it was proposed to amend legislation by regulation. So critical were we on that occasion that the right hon. Gentleman decided to put down amendments on Report to make unnecessary the amendment of legislation by regulation.
There is no possibility of doing that here. There is not time. We are dealing with a provision introduced in another place, and this is the last opportunity that we have to bite at this cherry.
The second factor which is apparent is that, whatever may be said, this legislation is retrospective. That in itself is always highly undesirable.
The third and perhaps the most important factor is that we are being asked to do this without the Government being able to tell the House at all, let alone precisely, what it is they intend to do with the regulation-making power which they ask us to confer upon them. Perhaps I may digress for a moment and remind the House how this comes before us. The Minister was quite frank about it. It comes before us at the last possible moment in the passage of the Bill through Parliament.
The amendment was tabled in another place six days ago, on Friday of last week. It appeared on the Order Paper in another place on Monday. It was debated on Tuesday. The Bill got a Third Reading in another place yesterday, Wednesday. The amendment appeared on our Order Paper this morning, Thursday, and we are now debating it this Thursday afternoon.

Mr. Orme: I do not dispute any of the facts. However, as we appear in this Parliament to be in a new period of consultation, I hope that the right hon. Gentleman will acknowledge that he has been fully informed of the Government's proposals and that he has seen both our proposals and the draft. We only proceeded as we did because of the tight time scale of the Bill.

Mr. Jenkin: The right hon. Gentleman boasts about the amount of consultation. I said that this amendment was tabled in another place on Friday of last week. Does he challenge me when I say that his consultation involved sending me a letter the day before, on the Thursday—

Mr. Orme: I spoke to the right hon. Gentleman personally.

Mr. Jenkin: I agree. The right hon. Gentleman happened to bump into me in the corridor. As a matter of fact, I do not know whether it was a Freudian slip, but the letter which was sent to me was undated. I have not been able to check the date.

Mr. Orme: We are getting clever.

Mr. Jenkin: Furthermore, will the right hon. Gentleman deny that the letter purporting to send me a copy of the amendment did not include the amendment and that it only reached me later—[Interruption.] The right hon. Gentleman


may find that amusing, but it is shoddy administration and it is not the first time that we have had occasion to complain about mistakes of this kind by his Department. It does not help him get through contentious legislation when his Department treat right hon. and hon. Members like that. But then the right hon. Gentleman has the effrontery to boast about prior consultation. One day before the amendment went down he sent me a letter explaining what it was about. This is no way to treat Parliament, and we are entitled to express some indignation.
The right hon. Gentleman is entitled to some sympathy, of course. He has been put in an unenviable position arising out of events which occurred when he was occupied elsewhere. But the least that he can do now is try to make amends by explaining a great deal more fully than he has so far what the amendment is about and try to allay the Opposition's anxieties.
The first question to which we need to know the answer is what are the categories of people who will be affected by this retrospective legislation. All we have been told so far—and here again I rely on Lord Wells-Pestell's speech—is that there are certain people with noncontributory incapacity benefits and that there are certain people affected by the phasing-out of the married women's contribution option.
But will it not apply to very much wider categories of people, including many who have simply broken contribution records, people who have earned some years ago and paid contributions, had a long period off work when no contributions were paid—the biggest category here is married women—and have then returned to work and become entitled to claim benefits on the basis of the credited contributions? We need to be told more precisely the ranges of people affected. We must be given some indication of the number and of the circumstances in which they are likely to be affected.
The second question concerns the retrospective effect. I believe that we need to have this very much more clearly defined. The House is always jealous about retrospective legislation—legislation which seeks to change the law retrospectively, or deny entitlement to benefit, or, as in this case, entitlement to credits

after the event, thus defeating expectations. The right hon. Gentleman said that this will not affect benefits claimed before 18th March, the date on which this new clause was tabled in the House of Lords. Today is 24th March, only six days later, but I shall be glad if he will confirm that, despite what is said in the clause, it is intended to disallow benefit entitlement where that entitlement arose before the date, even if no formal claim was made.
How will the regulations define the making of a claim? If the entitlement is there, will the simple approach to a benefits clerk behind the counter amount to a claim, or will the claim form particulars need to have been filled out in full before a claim can be allowed if it was made before 18th March? It is clear that, whatever may be said by Ministers, this is a retrospective amendment. I agree that they are seeking to limit the retrospectivity, but they have not succeeded, and part of the purpose of the clause is to effect the savings which would flow if it were not retrospective.
But we need to know the precise point at which it is retrospective. There will be claims that will be defeated on the basis of the retrospective operation of the clause, and we need to know what they will be.
My third point is the most important of all. The Minister must tell us how the limitation that it is intended to include is to be framed. How will it be defined? Will it be defined by the length in the gap between two periods of contribution? If so, what length of gap has the Minister in mind? He has told us that it is the intention to make regulations as soon as may be after the Royal Assent, and I will not accept that he has no idea at present of how he is to achieve this. If it is not the gap between successive contributions, will it depend upon a minimum total level of past contributions? If so, what level? How many contributions will the person need to have made before he avoids the mischief of this clause and the regulations to be made under it?
Perhaps at this point I should draw attention to an interesting exchange in another place. My noble Friend Lord Hawke said:
I think the noble Lord is mistaken. A considerable number of these people will be elderly ladies who work part-time.


Lord Wells-Pestell replied:
If that is so, then it may well be that they have a substantial contributory record behind them, so that if and when they are sick they would be entitled to benefits.
We are entitled to know what amounts to a "substantial contributory record" so that they will be entitled to benefits, including, presumably, the benefit of a credit for contributions. If it is not the gap between successive contribution periods, or the level of past contributions, what other test has the Minister in mind to apply as to whether the credits will be available?
The phrase used by the Minister for Social Security himself today was "a not insignificant record of contributions". He implied that it referred to the particular year. Is that the case? Is it the case that there must be a record of contributions in a particular year—the 12 or 24 months, or whatever it may be—before the benefit is claimed? We cannot pass from this clause until we have a clearer idea of how the Government propose to implement their intention of blocking this loophole. With the Bill having progressed so far and being within a few days or a week or two of the Royal Assent, the Government must have some idea of what they are to do.
The right hon. Gentleman did not refer today to it, but could he explain the cryptic statement by Lord Wells-Pestell towards the end of the debate in the other place on 22nd March? The noble Lord said:
It is very difficult to introduce a scheme which would produce a great deal more complexity than the existing schemes are producing at the present moment.
I think that there must be a misprint there. I know that the Labour Party has a pronounced penchant for producing complex schemes, but I do not think that it is its objective in life to do so. I suspect that in that passage a "not" has been omitted and that the sentence should read, "which would not produce a great deal more complexity than the existing schemes are producing at the present moment."

Mr. Deakins: indicated dissent.

Mr. Jenkin: The Under-Secretary of State shakes his head. Perhaps he thinks that I am misinterpreting what Lord Wells-Pestell said.

Mr. Deakins: I think that the right hon. Gentleman is in fact misinterpreting the remarks by Lord Wells-Pestell. Surely what my noble Friend is saying is that the existing social security legislation is so complex that it would be very difficult to devise a new scheme or add to a scheme in a way which would make it even more complex. What we are trying to do is to simplify.

Mr. Jenkin: If that be the case, it lends point to the next sentence in Lord Wells-Pestell's speech. I said that it was cryptic. He went on:
We need to have a deep and close look at the whole benefits system with which we are faced at present."—[Official Report, House of Lords, 22nd March 1977 Vol. 381, c. 397–400.]
Is Lord Wells-Pestell saying there that the Government are now proposing a new review of contributory benefits? That is what it seems to imply. If so, the House is entitled to be told rather more about it. Who is to undertake the review? What is meant by a "deep and close look" at the whole benefits system?
We know that an important review is going on, which I have warmly welcomed, arising out of the first annual review of the Supplementary Benefits Commission, produced by Professor Donnison a year ago and published as Command Paper 6615.

4.30 p.m.

Mr. Orme: Will the right hon. Gentleman allow me to clear up this point? It is not the Government's intention to have a wide-scale review of contributory benefits at the moment. I am sure that my hon. Friend the noble Lord did not mean to imply that.

Mr. Jenkin: I think that any of us might be forgiven for thinking that that is what the noble Lord was saying. It may have been one of those sentences that slip out at the end of a speech when one is trying to justify legislation that is difficult to justify, but there it is. We now learn that the Government are not proposing to have a deep and close look at the whole benefits system, notwithstanding the fact that a member of the Government said in another place that they were.
This is part of the pattern of legislation. It will become a great deal more difficult in future. We shall have the


right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) saying that there needs to be a great review of some aspect of Government policy, and we shall have the Minister standing up and saying that it is not the Government's intention to have a review. We can expect a great deal of that sort of confusion to come. Perhaps I am being a little lighthearted.
I have asked a number of serious questions about the amendment and we are entitled to answers, if only for the reason that it was only this morning that any hon. Member could have seen the amendment, unless he had got hold of papers prepared for another place.

Mr. Robert Boscawen: I shall make only a brief intervention. I apologise if my voice is not very good today. I feel in need of a non-contributory invalidity benefit myself. I intervene only to say that I find it very worrying when a Government seek regulatory powers regarding the contributory system.
The contributory system is so important that we need to have careful explanations of exactly what the Government are doing and what the implications are. I am as guilty as anyone in the House of having sought to have the contributory system modified in certain cases of individual hardship. We have always done so in cases of hardship involving our constituents but the argument has always gone against us, for the very sound reason that one cannot give way on one or two cases only. If we gave way on one case, we should have to give way on many others.
The contributory principle in the social security system has been sacrosanct. I accept the established benefit system. I therefore feel very strongly that if a Government come to the House to seek regulatory powers, especially retrospective regulatory powers to alter the contributory system, they must explain themselves very carefully. This is an important matter. There are not many hon. Members in the House at present, and perhaps not many hon. Members appreciate the importance of what the Government are doing. No doubt the Minister knows very well that he is interfering, or could be accused of interfering, in a system which has affected people in the past as much as it will do so in the future. Hard

decisions have had to be taken in the past, possibly affecting people who are no longer alive. They were decisions which perhaps seemed particularly harsh on some cases at the time.
There is the example of the contributory principle affecting the death grant. Certain groups of people cannot obtain a death grant at all because they are not in the contributory system. I am sure that there is no difference between the two sides of the House on this matter. A clause such as the one we are considering needs a great deal of consideration and explanation. I am considerably worried about it and am uneasy that Ministers could alter the contributory system by regulation in a number of individual cases, which could be most unfair to people who were affected by decisions taken a long time ago.
I know that the Minister will appreciate this. I feel it is right to say this. To affect the contributory principle in any way, particularly by regulations, is a very serious matter.

Mr. Peter Bottomley: I feel slightly worried about intervening in the debate, because we are dealing with a complicated matter, and, having gone through the report of the debates in another place, I am almost as confused as I was when I first read the amendment and before I had read the explanations that were given. I shall read one sentence from a speech made by Lord Wells-Pestell:
And, finally, there is the need to correct omissions and mistakes in legislation, and to provide firm statutory backing where at present the law appears open to doubt."—[Official Report, House of Lords, 3rd March 1977; Vol. 380, c. 809.]
I do not think that the noble Lord was referring specifically to the new clause that we are examining, but the assumption is that they had not found the mistake. Perhaps the Minister will confirm this.
The question of what the Government would have done if the Bill had already passed through this Chamber is one to which the Government should turn their mind. Just because there is an opportunity of tagging this matter on to the Social Security (Miscellaneous Provisions) Bill, it does not mean that the House should, without protest, allow the Government to give power to the Secretary


of State which normally he would not be allowed to have. The Government must have turned their mind to the way in which they would deal with this problem. They are lucky to have found time in the other place to put at least some of the debate on record so that we have had a decent opportunity of understanding the problem, even though we have not been able fully to take it up.
I do not know whether Standing Orders allow us to amend the new clause in order that it will take effect for a limited period only, so that the Government can consider the effect of the regulations and decide whether these powers should effectively reside with the Secretary of State for ever under this Bill and give him, as far as I can see, an unlimited amount of power to affect the benefits and contributions with which people may be credited. That is a very serious matter, especially when we do not know what the regulations are. I do not know whether the Department has had time to work out precisely what the regulations would aim to achieve, but it should have done.
If we are to give the Secretary of State this power, it is important to let the House know how the regulations are to work so that we can test their effectiveness. If the problem has been getting legislation through, or amending the 1975 Act quickly so that more claims do not become established—which seems to be the Secretary of State's intention—one presumes that the regulations will be subject to the approval of the House either by negative or affirmative resolution procedure. Or will the regulations go through without the House being able to consider them? If they are not subject to the approval of the House, how can we check that the new clause by itself will not achieve the purpose that the Department is quite rightly trying to achieve.
It is important to know how much the mistake cost. As the noble Lord said, and as many Labour Members have said, if we rush through legislation—as we unfortunately did last year, and as we appear to be doing this year with this clause—we shall let through things that the Government, the Department and the Opposition would not want to see go through.
The cost or the possible cost of the mistake should be put on the record. The

Government should also spell out the categories and classifications of those who are at present entitled to what the Government did not intend them to be entitled. This would be a good reminder to all of us of how important it is to get legislation right, especially when dealing with social security provisions and national insurance contributions and benefit provisions which affect virtually every working person, every retired person, and which will affect many people who have not yet started work.
The question of retrospection is important in this case. We have seen enacted retrospective legislation which has affected people's jobs. I do not want to go into the ramifications of the closed shop legislation which is taking away people's livelihoods. Retrospection in circumstances such as these will have a similar effect on people's income, or at least it could, unless we hear from the Minister that that is not so.
Publicity is another issue which must be dealt with. If those who might want to put in claims do not hear clearly how they should put the claims in or in what way they would be accepted a large number of people who may be their advisers or claimants themselves will want to know whether they qualify. This may be a slightly academic point. It might be rather like the case of people getting unemployment pay while on holiday in Spain. While it is a significant political issue is might not affect many people—and in the case I have cited the Government woke up in time.

Mr. Patrick Jenkin: Thanks to the Daily Mail.

Mr. Bottomley: Yes, sometimes the capitalist Press comes to the aid of the Government, and in that case it stopped the Government providing holidays abroad for those who were receiving benefit.
I should warn the Government that I feel so strongly about this mistake being brought to the attention of the public that I intend to divide the House, if only as a symbolic gesture of what one person can do. The only way to avoid this happening again is to be on the look out for it. I congratulate the person who discovered that the 1975 Act had a loophole,


and I feel that a Division might help in driving the point home for the House.

Mr. Orme: I am terrified at the hon. Gentleman's threat to divide the House. I shall have to make sure that the Liberals are aware of his intention—

Mr. Patrick Jenkin: Ought not the Minister of State quickly to summon the joint consultative committee under the chairmanship of the Lord President in order to tell it what is to happen?

Mr. Orme: I shall not comment further on that point.
The hon. Member for Woolwich, West (Mr. Bottomley) asked about the cost. I can assure him that not to do what we are proposing would cost far more than doing it. The two Front Benches agree that perhaps tens of millions of pounds could go to people who should not be entitled to the money.
I freely acknowledge to the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that a mistake was made. The Government have made no attempt to flannel their way out of that, or to hide the fact. Ministers have to take responsibility for it, and I accept that responsibility on behalf of the Government. We are now trying speedily but democratically to rectify the mistake.
Let me assure the hon. Member for Wells (Mr. Boscawen) that the whole point of the regulations provided for under the clause is to reinforce the contributory principle, not to remove it. We had a slight altercation with the right hon. Member for Wanstead and Woodford and he made his position quite clear. We are not out to undermine that principle.
It is not possible at this stage to give the details of the regulations, and that ties in with the point made by the hon. Member for Woolwich, West. The regulations will be introduced under the negative resolution procedure. The hon. Gentleman will be entitled to pray against them and, if necessary, to force a Division.
The details are still to be settled. I can confirm, however, that they will aim to achieve a restriction on the use to which credits may be put, but that this restriction will be consonant with our original intentions and with the contributory

basis of the scheme. For example, credits traditionally awarded with sickness and unemployment will not be limited by the regulations. People with a not insignificant contribution record for a year for which they have been awarded credits will be able to use those credits without restriction.

Mr. Patrick Jenkin: The phrase "not insignificant" is most vague. Does it mean one, three or six months' contributions? We must have some indication of that.

4.45 p.m.

Mr. Orme: The intention is to place a limitation on the use of credits which will be appropriate to the nature of the contributory National Insurance Scheme and which will be somewhat closer to the pre-1975 arrangements. Credits already awarded will be allowed to stand for benefit if in the year in which they were awarded a claimant had received a contributory benefit or had paid contributions of a specific amount. The amount to be specified will be contributions on earnings amounting to 13 times the lower earnings limit.

Mr. Patrick Jenkin: Does that mean three months?

Mr. Orme: Yes.

Mr. Patrick Jenkin: This is difficult to follow. I realise that the right hon. Gentleman is doing his best to be helpful in difficult circumstances. He said that in the year in question—and it was implied that benefit had been received in that year—part of the contributions would go towards an entitlement to a long-term benefit. Will the contributions to be credited in the circumstances that the right hon. Gentleman has described count towards the entitlement to the appropriate level of long-term benefit when the person reaches an appropriate age?

Mr. Orme: I shall come to the question of sickness, unemployment and retirement in a moment. These are complicated and difficult matters, which I could not pretend to answer without looking at them in greater detail. If my reply does not satisfy the right hon. Gentleman completely I can assure him that in good time and before the regulations are laid I shall set out as clearly as possible what the Government intend


to do. He will then be able to raise matters with me before the regulations are brought before the House. I hope that this goes some way towards meeting his point. I think that he has recognised that I am not in any way trying to avoid this matter or deal with it in a slipshod manner. He recognises, however, as I do, that this is a very difficult and complicated matter.
Let me press on with my explanation. Anyone who has worked is likely to have satisfied the first contribution condition, which is a certain number of contributions actually paid in any one year. The second contribution condition is a record of credits or contributions in the last tax year or in a certain number of tax years. This condition can be satisfied on credits alone. Six-months' unemployment or sickness would be enough to give sufficient credits to satisfy the second contribution condition. I hope that that goes some way towards meeting the specific point raised by the right hon. Gentleman.
The total of those affected comprises people who satisfy the first condition and satisfy the second condition on credits alone, but do not have any more orthodox or traditional entitlement to benefit. In particular, there will be many thousands of married women who have not taken employment for a long period. I cannot, therefore, be precise about the numbers involved, because of the difficulties and because we have to look at these matters in some detail when the regulations are presented to the House.
I now want to say something about retrospective credits. Strictly speaking, the provision in the Bill and in the regulations will not restrict entitlement to credits. The intention is to place a limitation in the regulations on the use to which these credits may be put for benefit entitlement. The normal provisions in the claims and payments regulations will apply. I have endeavoured to answer this complex and detailed debate and the important points raised by hon. Members. I hope that we can now accept this amendment.

Mr. Peter Bottomley: By leave of the House. I think that the Minister has missed out one or two important points. How would the Secretary of State have dealt with the problem if the Bill had

already gone through? I suspect that the answer is that he does not know. Does he need the powers running on or would the new clause be amended in such a way that he would have the powers to deal with this problem without having permanent regulatory powers which were not in the Social Security (Miscellaneous Provisions) Bill?

Mr. Orme: The Government would have had to find other legislative time to bring in these proposals. The fact is that we had the Bill at the time, and that is why we took the first occasion to raise this matter. But we would have had to come before the House at some time.

Mr. Patrick Jenkin: I think that the right hon. Gentleman has fairly recognised the complexity of these matters. I say at once, that to use his own words, he has endeavoured to answer our questions. For that we are grateful. But he has left us not much wiser than we were beforehand. He said that there could be large numbers of women who will have worked for a few years before marriage or a year or two after and who then have a long gap while bringing up their families. They then register for work, have a period of sickness and unemployment, and the credits automatically give them entitlement to benefits. We are talking about not just tens of thousands of people but millions.
The Minister of State looks quizzical at that comment. If this provision includes any married woman who has had a break in her contribution record, we are talking about 10 million or 15 million people. This is a wide-ranging clause, which makes it all the more unsatisfactory that it is just six days since it appeared in Parliament. I do not know what time the Vote Office opened this morning, but I collected my copy at 8.30 a.m. That was the first time anyone in the House had the chance to see the clause.
We are entitled to be critical of the Government's legislation. I appreciate their difficulties. The right hon. Gentleman implied—my hon. Friend the Member for Woolwich, West (Mr. Bottomley) made it clear—that if the matter was not dealt with in this Bill it would have been dealt with in some other Bill—perhaps the direct labour legislation


or the Scotland and Wales Bill, or some other piece of legislation that will be introduced by the leave and licence of the Liberal Party.
The right hon. Gentleman said that we would not be disentitling anyone from credit but that that person would not get any benefits as a result of the credit. I do not know what value a credit is if it does not entitle a person to benefit. Are we to assume that this is a matter of semantics—that a person will be disentitled to the credit even though it will be put up in a computer somewhere in Newcastle?

Mr. Orme: Credits are most important for the retirement pension.

Mr. Jenkin: This is interesting, because that was exactly the question I asked earlier. The right hon. Gentleman said that he would deal with pensions. I did not hear him say anything about them, but he now mentions them. Are we to understand, therefore, that the purpose of these regulations is to disentitle the claimant to short-term benefits but to allow the credit to stand for the purpose of claiming long-term benefits, retirement benefits or long-term invalidity benefits? We need to know more about this.
There is one group of people for whom credits are more important than for others. They are the people who stay at home to look after elderly relatives. My noble Friend Lord Drumalbyn had two attempts at raising this problem. I shall not quote the first, because it was rather long, but in the second attempt he said:
My Lords, could I put it in another way? I am wholly in favour of the contributory system. I think that it ought to be safeguarded. There are in certain circumstances occasions when a person could be treated as having made a notional contribution because of the saving he—or more often she—is making to the State in other ways. There are considerable savings to the State from people looking after parents or relatives at home.
Lords Wells-Pestell replied:
My Lords, this is so.
Then he changed the subject. He said:
Later we will deal with the question of the allowances to foster parents in the matter of handicapped children.
He went on to say:
they are saving the State a considerable amount".—[Official Report, House of Lords, 22nd March 1977; Vol. 381, c. 400.]

My noble Friend Lord Drumalbyn got absolutely no answer to his question.
We all know of—because we have all met representatives of that wholly admirable organisation—the National Council for the Single Woman and her Dependants. I was privileged to address its annual meeting about a year ago, in the Grand Committee Room in this House. I have been a great admirer of the Rev. Mary Webster, now deceased, and her successors, who established that important and powerful organisation.
There is a category of people who could well be prejudiced by this clause unless the regulations are drawn much tighter so as to disallow only those whom Parliament could not have had in mind as being entitled to the benefits of the credit contributions when the 1975 Act went through Parliament. This merely reinforces the totally unsatisfactory way in which we are having to deal with this legislation, at such desperately short notice.
I read my noble Friend's question and the inadequate answer. I now have a representation which reached my hon. Friend the Member for Wallasey (Mrs. Chalker) in an urgent letter from the secretary of the All-Party Group for the Disabled, who read the Lords' Report this morning. It was only on Tuesday that these matters were debated in another place. The Secretary of the group is an extremely active young man, and many of us know him. He recognised the importance of this point and made sure that we were entitled to raise it in the debate. We cannot do anything about it. We cannot amend the clause because the Question has already been put.
We cannot even do what my hon. Friend suggested—give the Government a limited power to look at it and return to the House later. We can do none of these things. I accept that there is a great deal of money at stake which Parliament, if attention had been directed to the matter by the Government, would never have dreamed of allowing to slip through the net. For that reason we have to give the Government their new clause. That is a desperately unsatisfactory way of legislating. I hope that the right hon. Gentleman will bring it home to those responsible that Parliament regards this as a disgrace and quite the wrong way to treat important matters of legislation.

Mr. Orme: The right hon. Gentleman has asked some specific and searching questions, but his anger is a little synthetic. He is trying to elicit information to which the House is entitled. I shall deal with the points he made about the single person looking after their parents, aged people and so forth.
5.0 p.m.
Credits are awarded to people in receipt of invalid care allowance. The regulations will not affect the use to which those credits can be put. If invalid

care allowance has been provided that will be covered. It is intended that the additional powers given by this Bill should be used to restrict the use of credits for the purpose of sickness benefit, invalidity pension, unemployment benefit and maternity allowance. Retirement and widows' pensions based on the 1975–76 and 1976–77 credits will not be affected.

Question put:—

The House divided: Ayes 229, Noes 47.

Division No. 95.]
AYES
[5.00 p.m.


Abse, Leo
Forrester, John
McDonald, Dr Oonagh


Allaun, Frank
Fowler, Gerald (The Wrekin)
McElhone, Frank


Archer, Peter
Fraser, John (Lambeth, N'w'd)
MacFarquhar, Roderick


Armstrong, Ernest
Freeson, Reginald
MacKenzie, Gregor


Atkins, Ronald (Preston N)
Freud, Clement
Maclennan, Robert


Bagier, Gordon A. T.
Garrett, John (Norwich S)
Madden, Max


Bain, Mrs Margaret
Garrett, W. E. (Wallsend)
Magee, Bryan


Barnett, Guy (Greenwich)
George, Bruce
Marks, Kenneth


Barnett, Rt Hon Joel (Heywood)
Gilbert, Dr John
Marshall, Jim (Leicester S)


Bates, Alf
Ginsburg, David
Mason, Rt Hon Roy


Bean, R. E.
Golding, John
Maynard, Miss Joan


Beith, A. J.
Gould, Bryan
Meacher, Michael


Benn, Rt Hon Anthony Wedgwood
Graham, Ted
Mendelson, John


Bennett, Andrew (Stockport N)
Grant, George (Morpeth)
Mikardo, Ian


Bidwell, Sydney
Grimond, Rt Hon J.
Millan, Rt Hon Bruce


Bishop, E. S.
Grocott, Bruce
Miller, Dr M. S. (E Kilbride)


Blenkinsop, Arthur
Hamilton, James (Bothwell)
Mitchell, R. C. (Soton, Itchen)


Booth, Rt Hon Albert
Hamilton, W. W. (Central Fife)
Molloy, William


Bottomley, Rt Hon Arthur
Hardy, Peter
Moonman, Eric


Boyden, James (Bish Auck)
Harper, Joseph
Morris, Charles R. (Openshaw)


Bray, Dr Jeremy
Harrison, Walter (Wakefield)
Morris, Rt Hon J. (Aberavon)


Brown, Hugh D. (Provan)
Hart, Rt Hon Judith
Moyle, Roland


Brown, Robert C. (Newcastle W)
Hatton, Frank
Murray, Rt Hon Ronald King


Brown, Ronald (Hackney S)
Hayman, Mrs Helene
Newens, Stanley


Buchan, Norman
Healey, Rt Hon Denis
Ogden, Eric


Butler, Mrs Joyce (Wood Green)
Heffer, Eric S.
Orbach, Maurice


Callaghan, Jim (Middleton &amp; P)
Henderson, Douglas
Orme, Rt Hon Stanley


Campbell, Ian
Hooley, Frank
Ovenden, John


Canavan, Dennis
Horam, John
Owen, Rt Hon Dr David


Carmichael, Neil
Howell, Rt Hon Denis (B'ham, Sm H)
Palmer, Arthur


Cartwright, John
Huckfield, Les
Pardoe, John


Castle, Rt Hon Barbara
Hughes, Rt Hon C. (Anglesey)
Park, George


Clemitson, Ivor
Hughes, Mark (Durham)
Parker, John


Cocks, Rt Hon Michael
Hughes, Robert (Aberdeen N)
Parry, Robert


Cohen, Stanley
Hughes, Roy (Newport)
Pavitt, Laurie


Coleman, Donald
Hunter, Adam
Perry, Ernest


Cook, Robin F. (Edin C)
Irvine, Rt Hon Sir A. (Edge Hill)
Phipps, Dr Colin


Cowans, Harry
Irving, Rt Hon S. (Dartford)
Prentice, Rt Hon Reg


Cox, Thomas (Tooting)
Jackson, Colin (Brighouse)
Prescott, John


Crawshaw, Richard
Jackson, Miss Margaret (Lincoln)
Price, C. (Lewisham W)


Crowther, Stan (Rotherham)
Janner, Greville
Price, William (Rugby)


Cryer, Bob
Jay, Rt Hon Douglas
Radice, Giles


Cunningham, G. (Islington S)
Jeger, Mrs Lena
Rees, Rt Hon Merlyn (Leeds S)


Davies, Bryan (Enfield N)
Jenkins, Hugh (Putney)
Richardson, Miss Jo


Davies, Denzil (Llanelli)
John, Brynmor
Roderick, Caerwyn


Davis, Clinton (Hackney C)
Johnson, Walter (Derby S)
Rodgers, George (Chorley)


Deakins, Eric
Jones, Alec (Rhondda)
Rooker, J. W.


Dean, Joseph (Leeds West)
Jones, Barry (East Flint)
Rose, Paul B.


Dell, Rt Hon Edmund
Judd, Frank
Ross, Stephen (Isle of Wight)


Douglas-Mann, Bruce
Kaufman, Gerald
Rowlands, Ted


Duffy, A. E. P.
Kelley, Richard
Ryman, John


Dunwoody, Mrs Gwyneth
Kerr, Russell
Sedgemore, Brian


Eadie, Alex
Kilroy-Silk, Robert
Shaw, Arnold (Ilford South)


Edwards, Robert (Wolv SE)
Kinnock, Neil
Sheldon, Rt Hon Robert


Ellis, John (Brigg &amp; Scun)
Lambie, David
Shore, Rt Hon Peter


English, Michael
Lamborn, Harry
Silkin, Rt Hon John (Deptford)


Ennals, David
Lamond, James
Silkin, Rt Hon S. C. (Dulwich)


Evans, Ioan (Aberdare)
Latham, Arthur (Paddington)
Silverman, Julius


Ewing, Harry (Stirling)
Lestor, Miss Joan (Eton &amp; Slough)
Skinner, Dennis


Ewing, Mrs Winifred (Moray)
Lipton, Marcus
Small, William


Fitch, Alan (Wigan)
Luard, Evan
Smith, John (N Lanarkshire)


Foot, Rt Hon Michael
Lyon, Alexander (York)
Snape, Peter


Ford, Ben
McCartney, Hugh
Spearing, Nigel




Spriggs, Leslie
Urwin, T. W.
Willey, Rt Hon Frederick


Stallard, A. W.
Varley, Rt Hon Eric G.
Williams, Rt Hon Alan (Swansea W)


Steel, Rt Hon David
Wainwright, Edwin (Dearne V)
Williams, Alan Lee (Hornch'ch)


Stewart, Rt Hon Donald
Walden, Brian (B'ham, L'dyw'd)
Williams, Rt Hon Shirley (Hertford)


Stoddart, David
Walker, Harold (Doncaster)
Wilson, Rt Hon Sir Harold (Huyton)


Strang, Gavin
Walker, Terry (Kingswood)
Wilson, William (Coventry SE)


Strauss, Rt Hon G. R.
Ward, Michael
Wise, Mrs Audrey


Swain, Thomas
Watkins, David
Woodall, Alec


Taylor, Mrs Ann (Bolton W)
Watkinson, John
Wrigglesworth, Ian


Thomas, Jeffrey (Abertillery)
Watt, Hamish
Young, David (Bolton E)


Thomas, Ron (Bristol NW)
Weetch, Ken



Thorpe, Rt Hon Jeremy (N Devon)
Wellbeloved, James
TELLERS FOR THE AYES:


Tomlinson, John
White, James (Pollok)
Mr. Joseph Ashton and


Torney, Tom
Whitehead, Phillip
Mr. James Tinn.


Tuck, Raphael
Whitlock, William





NOES


Arnold, Tom
Hordern, Peter
Osborn, John


Bennett, Sir Frederic (Torbay)
Hutchison, Michael Clark
Page, Rt Hon R. Graham (Crosby)


Bennett, Dr Reginald (Fareham)
James, David
Rees, Peter (Dover &amp; Deal)


Body, Richard
Jessel, Toby
Rees-Davies, W. R.


Brittan, Leon
Jones, Arthur (Daventry)
Rodgers, Sir John (Sevenoaks)


Buck, Antony
Lawrence, Ivan
Scott-Hopkins, James


Clarke, Kenneth (Rushcliffe)
McNair-Wilson, M. (Newbury)
Sinclair, Sir George


Cooke, Robert (Bristol W)
Marshall, Michael (Arundel)
Smith, Dudley (Warwick)


Cormack, Patrick
Mates, Michael
Tebbit, Norman


Durant. Tony
Maxwell-Hyslop, Robin
Viggers, Peter


Eden, Rt Hon Sir John
Mayhew, Patrick
Walker, Rt Hon P. (Worcester)


Eyre, Reginald
Miller, Hal (Bromsgrove)
Warren, Kenneth


Fairbairn, Nicholas
Mills, Peter
Winterton, Nicholas


Farr, John
Montgomery, Fergus



Fookes, Miss Janet
Morris, Michael (Northampton S)
TELLERS FOR THE NOES:


Fry, Peter
Newton, Tony
Mr. Peter Bottemley and


Harvie Anderson, Rt Hon Miss
Onslow, Cranley
Mr. Anthony Steen.

Question accordingly agreed to.

Lords amendment agreed to.

Mr. Patrick Jenkin: On a point of order, Mr. Deputy Speaker. I apologise for raising this matter now but no notice has yet been given to the House about how the Government have suggested, or how the Chair has agreed, that the amendments should be grouped. When Amendment No. 1 was moved the Chair indicated that certain amendments would be debated together. I understand that there will be further grouping, and it would be helpful if we could have some indication about this.
More generally, is it not usual, even with Lords amendments, that where a selection is made that involves some grouping, the information should be made available so that we know how the amendments will be taken? Otherwise it is inconvenient for those of us who are trying to grapple with the legislation.

Mr. Deputy Speaker (Sir Myer Galpern): I accept the point. The grouping has not been presented. However, I am willing, if hon. Members do not have these details, to give them to the House now.
Amendment No. 2 will be taken alone, as will Amendment No. 3. Amendment

No. 4 will be taken with Amendments Nos. 5, 6, 7 and 16.

Mr. Deakins: On a point of order, Mr. Deputy Speaker. It was the Government's intention that Amendment 16 should be debated separately and only Amendments Nos. 4, 5, 6 and 7 taken together.

Mr. Deputy Speaker: I have not received any intimation of that, so perhaps even the Chair is being hoodwinked to some extent.
In that case, Amendment No. 5 will be put formally as will Amendments Nos. 6 and 7. Amendment No. 8 will be called on its own and Amendment No. 9 will be called with Amendments Nos. 11 and 12. Amendment No. 10 will be called separately. Amendments 11 and 12 will then be put formally. Amendment 13 will be called separately, Amendments Nos. 14, 15 and 17 will be put formally, and Amendment No. 16 will be taken alone.

Mr. Patrick Jenkin: I am grateful to you, Mr. Deputy Speaker. That was extremely helpful, and fits logically with the way in which the amendments hang together. I am not clear why the Government are suggesting that Amendment No. 16 should be taken separately, but


we are perfectly happy if that is the way the Government want it.

New Clause B

REVIEW OF EARNINGS RULE OPERATION

Lords amendment: No. 2, in page 6, line 19, at end insert new Clause B—
B. The Secretary of State shall review the operation of the earnings rule for retirement pensioners and the wives of retirement and invalidity pensioners and the cost of its abolition, including the extent to which it acts as a disincentive to work and shall lay a report of his review before Parliament by 31st October 1978.

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
We welcomed to our last debate the hon. Member for Liverpoool, Wavertree (Mr. Steen), who was acting as a Teller. I was glad to see him awake and active—though he appears not to be present now.
The purpose of the new clause is to put a formal duty on the Secretary of State to report to Parliament on the operation of the earnings rule and the cost of its abolition. This report would have to be made by the end of October 1978, and would presumably be published.
The clause is similar to that introduced by the right hon. Member far Wanstead and Woodford (Mr. Jenkin) on Report, on 14th February, save that it does not require a review of the operation of the therapeutic earnings rule for invalidity pensioners. The Government opposed these clauses in the Commons and in the Lords on the grounds that the review would cause additional work for the Department of Health and Social Security; that it would not make funds available for abolishing the earnings rule, and would not bring forward the date on which abolition could be afforded. The new clause was negatived in the Commons but carried on a Division in the Lords.
5.15 p.m.
It remains the Government's view that such a review is not necessary on its merits. However, in the Commons, I undertook to consider the suggestions of the right hon. Member for Wanstead and Woodford for obtaining more detailed information about the effect of the earnings rule and I assured the House that

the Government would always seek to have available for the House accurate and up-to-date costings. Points were also made in the Lords about the need for a working document giving the current situation in 18 months' time and taking account of the changes in relevant factors that might well have taken place by then. In view of this, and the fact that the proposed review no longer encompasses the therapeutic earnings rule, the Government propose to accept this Lords' amendment.
We envisage that the report will set out the cost of abolishing the earnings rule in the same amount of detail as in the note produced for hon. Members at the Committee stage of the Bill. I note, incidentally, that despite the doubts that the Opposition tried to raise about the figures in that note, the right hon. Member for Wanstead and Woodford, during the debate on public expenditure on 17th March, accepted that those figures were convincing.
The Lords amendment also requires the Secretary of State to assess to what extent, if any, the earnings rule acts as a disincentive to work. In covering this issue in the report we shall make the maximum use of the results of the full-scale survey into the reasons for retirement that is currently being carried out by the Office of Population Censuses and Surveys for the Department of Health and Social Security and the Department of Employment. This should enable us to assess, among other matters affecting the older working population, the impact of the earnings rule.
We shall also consider what other sources of information are available, so that the fullest possible information is available to Parliament in October next year. However, I feel bound to say that I do not expect that the review will enable us to depart from our conclusion that abolition of the earnings rule would be an expensive proposition and, if that is so, that the prospects of finding the resources to dispense with it in the near future are extremely slim.

Mr. Patrick Jenkin: We are pleased that the Government have allowed wiser counsels to prevail and have decided to accept the obligation to review and to report on the earnings rule. I am at a loss to understand why the Government


resisted this so fiercely when the matter was debated earlier in the Commons.
The right hon. Gentleman says from a sedentary position that it is unnecessary. That is perhaps a little inconsistent with what his hon. Friend has just said—that because of the change of policy in the operation of the therapeutic earnings rule and a number of other steps the Government were now prepared to accept this.
Of course the Government will conduct this review. They will be under constant pressure from all parts of the House to ensure that we are provided with up-to-date figures, but the clause will concentrate their mind on the need for a fresh look at this in time to report to Parliament by the autumn of next year, when we shall have another opportunity to examine it.
For two years the House was fed with figures about the effect of raising the earnings limit or abolishing the earnings rule that the Government have admitted were wrong. The word used in Committee by the Under-Secretary to describe some of the earlier figures that he and his colleagues had given us was "hilarious", in the light of the later studies that they had made.
On Report, the hon. Gentleman said:
I am prepared to accept that the figures may be wrong. The important question is by how much they are wrong.
Here we come to an absolute gem:
I am confident that they cannot and will not be as wrong as previous estimates have been in the past.
I suppose it is something to claim that Government statistics will not be as wrong as earlier figures, but it is not saying much. The House will recollect that the cost of abolishing the earnings rule turns primarily on the change in the number of people who defer retirements, and the Government figure for deferments in March 1976 was 120,000. They subsequently corrected that to 180,000. This error made a difference of £70 million or £75 million in the cost of abolishing the rule, and represents more than all the savings hoped for as a result of the Bill—and that was only one of a number of errors.
We need the review for other reasons. The Under-Secretary also said, on Report:
I am prepared to accept from him

—that is, from me—
that if they are wrong they are more likely to be wrong in the direction which he suggested than in the other".—[Official Report, 14th February 1976; Vol. 926, c. 107–108.]
The Minister was right. I suggested that the forecast of retirements, even now that the Government figures are clearly more reliable than those that we were given before, could still be substantially in error because the Government failed to take account of the extent to which people would earn more money and they also overestimated the number of people who would defer retirement. I expect the number who have deferred retirement to be substantially more than the Government have estimated. The savings achieved by not raising the earnings limit from £35 to £50 a week will be a good deal less than the £45 million net that the Government hope to save as a result of the Bill. Perhaps the Minister can give us some more information on that point.
In another place, my noble Friends raised doubts about the figures in the Government's paper relating to the cost of invalidity pensions. I concede that they may have overstated the argument. In the light of comparisons that we have made since then between the DHSS paper and the survey carried out by the OPCS, it is clear that they accord more closely than was allowed in another place. However, that does not alter the fact that the Government do not know, to use the words in their paper, the number of:
invalidity pensioners not receiving an allowance for an adult dependant because their wives' earnings exceed the limit under the earnings rule.
The Government are guessing about the number of wives living away from their husbands and hence unaffected by the rule, and they do not know whether all the 52,000 are actually in work in the first place.
There are still many uncertainties. I am glad to see the Under-Secretary nodding his assent to that proposition. The hon. Gentleman has conceded that the figure is likely to be less than the figures on which the Government had based their thoughts. In these circumstances, it is surprising that they resisted for so long the review and report for which we pressed earlier.
Reference has been made to my intervention in the public expenditure debate.


In a sense, I was intervening in someone else's debate. My right hon. and learned Friend the Member for Surrey, East (Sir G. Howe) and my hon. Friend the Member for Guildford (Mr. Howell) were speaking for the Opposition, but the Chief Secretary allowed himself some unpardonable liberties in his references to the proceedings on this Bill.
The Opposition have taken a highly responsible attitude on the earnings rule. We have forced increases from £13 to £15 to £20 to £35 to £50, with the support of a number of hon. Members opposite, including the hon. Member for Islington, South and Finsbury (Mr. Cunningham), in successive debates. However, we are prepared to swallow part of our achievements and accept the overriding need of the Government to reduce the borrowing requirement and curb public expenditure. We therefore accept the postponement of the increase in the earnings limit from £35, dynamised to £50, and that is a measure of our responsibility. I was more than a little piqued to get no credit for that from the Chief Secretary who, on the contrary, tried to suggest that we had acted with gross irresponsibility on the Bill. We have done nothing of the sort.
We said some time ago that we would not swallow the clause that introduced means-testing for a contributory national insurance benefit—unemployment benefit for pensioners. Apart from Ministers, no hon. Member has supported that clause. I make no excuse for the fact that we took it out in Committee and I congratulated the Government for not trying to put it back on Report.
I received a letter from the Under-Secretary of State on 22nd March in which he referred to three suggestions that I had made on 14th February for obtaining more detailed information. I am grateful for what the hon. Gentleman said and I think that I should read the letter in order to get it into the record, so that everyone knows what has been agreed.
5.30 p.m.
The Under-Secretary said:
More recently the proposal which you were then advocating that a requirement should be placed on the Secretary of State to report to Parliament on the operation of the rule has been taken up by the House of Lords and carried in the form of an amendment to

the Bill. The Government's view, in the Lords as in the Commons, is that such a review is not necessary on its merits and will not be particularly helpful in bringing forward the date when the rule can be done away with. Nevertheless, as you may know from Lord Wells-Pestell's letter of 16 March to Baroness Young, we do not wish to re-open the argument on this issue, and work will be put in hand to enable the Secretary of State to carry out this duty. We shall make the maximum use of survey information which is already available or which can be expected to come to hand in the course of the next year: this will include the full scale survey of the Reasons for Retirement which is now being carried out by the Office of Population Census and Surveys. The first results of this are expected to be available by the end of 1977, with further analyses in the first half of 1978.
I hope that the Government will feel it right to approach the bodies outside, particularly Age Concern and Help the Aged, who might have information that will be helpful.
The letter continued:
It will certainly be the Government's intention to see that the fullest possible information is available to Parliament as a result of the report which we have to make in the Autumn of next year, although I do not myself expect that it will enable us to depart from the conclusion that to phase out the earnings rule, although desirable, is and remains an expensive proposition.
I do not know how the Minister can say that with certainty, because the survey may show that the cost is substantially less than the Government believe it to be now.
My hon. Friend the Member for Wirral (Mr. Hunt) asked the Minister to specify the nature and purpose of the 20 surveys and statistical returns referred by his Department to the Survey Control Unit of the Central Statistical Office. The Minister said:
Earning capacity of invalidity pensioners: a survey by the Department to examine the effects of the earnings rule on invalidity pensioners and to investigate the availability and conditions of such employment".—[Official Report, 16th December 1976; Vol. 922, c. 822.]
Can the Minister tell us anything more about that? It is now more than three months since that question was answered. When will the survey be completed? Can the Minister confirm that the results will form part of the review and report that will be made to the House under the new clause?
The review is not only desirable but necessary. All parts of the House are committed to ending the earnings rule as


soon as conditions permit. If we are to do that and to do our duty properly it is essential that Parliament has accurate up-to-date information, so that any Government that are in power—our Government will be in power by the autumn of next year—will be held to that commitment by Parliament in order that we may abolish the earnings rule as soon as we can afford to do so.

Mr. George Cunningham: I regard the proposition in the new clause as a well-intentioned blunder that we shall live to regret. It is suggested by the right hon. Member for Wanstead and Woodford (Mr. Jenkin) that it will be possible for the report to contain figures that will somehow he divinely accurate and that everyone will see as being divinely accurate. Although some figures may be more reliably accurate than figures that we have had in the past—and some of them are the more important figures—some figures are those that one can never be sure of because one cannot know what people would have done if one had not changed the conditions. As Bernard Shaw once said, one does not know what would have happened to the patient if one had not cut off his leg. That is an assessment that one has to make when attempting to abolish the earnings rule.
Although I entirely agree with the content of the Conservative Political Centre pamphlet written by the hon. Member for Rushcliffe (Mr. Clarke), it must be said that the figures are subject to great dispute.

Mrs. Lynda Chalker: The hon. Member will remember that that pamphlet was published in July last year. That was a long time before we had the late-night paper that has served to set us right. If the hon. Member is in full agreement with the direction of that pamphlet we shall have the new figures that will come forward in the survey and we shall find that they come to the same conclusions as he did on that occasion.

Mr. Cunningham: I wonder. What about the last two years? What has helped us to get through the change in the earnings rule? It has been bad, unreliable figures, which can be ridiculed in the House. Now we are to have a Blue Book, or something, that will have a great

deal more respectability than the rotten figures that we have had so far.

Mr. Patrick Jenkin: Is the hon. Member seriously arguing that responsible hon. Members should make policy decisions on the basis of figures that they know to be inaccurate and at which they can therefore scoff.

Mr. Cunningham: Certainly. If one is intent on securing some reform any weapon may be used for that purpose. Mistakes on the part of opponents are the best weapons that one has. That is how we got it done two years ago. The road to hell is paved with good intentions and those in this House and in the Lords who thought that it might help, might have another think coming towards the end of 1978.
I hope that we are not to spend a lot of money on the report. Let us have a fairly modest operation. The more expensive it is the more we shall feel obliged to pay attention to its policy content. The report is to be brought to us only by 31st October 1978. We all know the chances of getting a change in policy pending the production of a report; there is no chance at all. That rules out any change in April 1978 and November 1978—the two occasions on which a change could possibly be secured.
The next relaxation of the earnings rule is now put off by this draft amendment until the spring of 1979, and it is more likely to be November 1979 at the earliest. I accept that the changes to the threshold in the Bill will come into effect. I am talking about further changes to the rule. The object of the report is to form a basis for further changes to the rule, additional to those in the Bill. There will be no further changes to the rule, additional to what is in the Bill, until at least April 1979 and, more likely, November 1979. That is because any move to change the rule will be met with the story that the report is in preparation and therefore we must wait for it.
Finally, since we have to have this wretched report, the Government should ensure that the report addresses itself not only to the phasing of the rule or its sudden abolition by means of changes in the threshold figure but also to the possibility of a reduction in the age limit.


That is a time when people are sensitive on the score of costs, and the easiest, and possibly the best way, in substance, of making a further change in the rule.
As I said in Committee, I do not think that we should exclude the possibility of lowering the upper age for men to 69 or to 68 while not necessarily lowering the upper age for women below the age of 65, where it rests now. A change down to 68 for men would involve a cost, as far as I recollect, of about £15 million to £20 million on the Government's present figuring. That is a change which I should have thought would be bearable at some stage during the coming two years.
I hope that the report will at least address itself to that possibility as well as to the more traditional ways of phasing out the rule.

Mr. Tony Newton: I rise to make only a brief contribution. In that, I am not provoked but rather encouraged by the remarks of the hon. Member for Islington, South and Finsbury (Mr. Cunningham), because I think that it ought to be clear that there is some measure of agreement across the Back Benches of the House, at any rate. I should like, therefore, to endorse much of what the hon. Gentleman said. I hope that my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin) will not take it amiss if I even say that I have a good deal of sympathy with what the hon. Gentleman has just said about the danger of politicians placing too much emphasis on statistics. I hope that I am not misreading what the hon. Gentle-can said. I acept his point that bad figures are a good argument against Governments anyway and that any argument that comes to hand can be useful in a good cause.
However, I also think that there is here a broader danger into which politicians are all too apt to fall—that an argument that has a value content can be settled conclusively by a set of statistics. Over the last few years one of the greatest problems met by people on both sides of our political system, and not least by those responsible for affairs in the Treasury, has been the belief that if the glorious little statistics show something, that in itself is a conclusive and an effective political argument.
I do not want to press the argument too far. However, if any one of us said to most retired people in our constituencies in the age bracket about which we are talking, men between 65 and 70 who object to the earnings rule, "We shall have a great report and then we shall see what the statistics show, and I shall return and tell you what I think in the light of the statistics", and then if the statistics showed that there would be this and that cost on this and that assumption, most of them would say "That is all very well. Your statistics may be right or wrong, but I simply think that the earnings rule is unfair."
That is the judgment that we are paid to make as politicians—whether something is right or wrong.

Mr. Patrick Jenkin: Does my hon. Friend not agree that there are a great many points on which our constituents can and do come to us saying that things are unfair, but that if we were to give in to them all we would only have the bailiffs of the IMF back knocking on the Treasury's door? Surely it is the responsibility of serious politicians to have regard to all competing claims and to do their best to weigh up costs and say that this or that has the higher priority. But we must live within our means. We are talking not just about statistics but about costs. The fact that it is I who have come to the rescue of the hon. Gentleman on this matter should reinforce the case that we must take this unpalatable step because we cannot afford the cost. I think that that is a measure of how responsible the Opposition are being in this respect.

5.45 p.m.

Mr. Newton: I entirely accept both my right hon. Friend's implied rebuke and the fact that on this matter I am, perhaps, rather more softhearted—to use one phrase that could be applied—than those on both Front Benches. I accept the responsibilities that the Front Benches must take. I would not want to press my argument too far.
However, I hope that in the search for truth in statistics and on costs we shall not lose sight of what we are discussing—a rule the operation of which is held to be very unfair. It is held so both by many of those to whom it applies and by almost anyone who looks at the situation.
We talk about the earnings rule, but let us consider what it means. In its own way, it is a term of art. We tend to forget what it means. It means a situation in which a man can work until he is 65, paying national insurance contributions which, he is told, entitle him to a pension at the age of 65. When he reaches the age of 65 he decides that he would like to go on working—which, on the face of it, is a splendid thing for the community, considering that the man could retire and live on the contributions that the rest of us are paying but chooses to go on working and putting something into the community—instead of seizing him by the arm and saying "splendid fellow, you are a great asset to the nation", we say "If you do this we shall not only tax you on what you earn but reduce the pension for which you have already paid, and you will be entitled to get the full benefit of the contributions that you have paid only if you cease working".
I accept that there are problems about costs, especially at present. However, let no one run away with the idea that this is just a rather academic little argument. Whether the statistics go one way or the other, there is a very important point of principle here, to me at any rate. I want to see this rule go as soon as we can get rid of it.
That brings me to the last point that want to make in supporting what the hon. Member for Islington, South and Finsbury said. We shall have this report. I hope that the figures will be as right as they can be. I hope—indeed, I strongly suspect—that they will give additional support to the case of those of us who would like to see the rule go rather earlier.
However, I should like to urge that the Government should not, in concentrating on the report and trying to get it out, fail to spend a little time thinking about not just arguments for not doing anything, arguments for slowing down or reversing what the House has already done, but about the constructive side of the hon. Gentleman's remarks, which is other ways of getting rid of the rule, in smoother and simpler ways, and perhaps keeping costs down below present costs. The Government should not be providing just further ammunition for opposing the argument for getting rid of the rule. They should appreciate the

arguments for positively removing the rule as soon as possible.
I know that everyone says that this is his aim, but I gain an increasing impression that, at least on the official side and in the official machine, the main thought at present is to find reasons for not getting rid of the rule, whereas I want to see us getting rid of it once and for all.

Mr. Deakins: The right hon. Member for Wanstead and Woodford (Mr. Jenkin) raised three major points. As to the first, we have no later information since the Committee stage. Secondly, I regret to say that the right hon. Gentleman's reference to Survey 15, referred to in the answer last December, has nothing to do with the amendment. It is an entirely separate survey. As I understand the position, there will be no information in that one which will be of benefit to us.
However, the right hon. Gentleman has quoted extensively from the letter that I wrote to him. To the extent that the OPCS survey about which we have been talking does not provide the requisite information, particularly about working wives, we shall have to see what other means we have of getting it. The reason for mentioning that is that since Survey 15 does not assist us, we shall have to find some other means of getting the required information.

Mr. Patrick Jenkin: How can the survey set out in the reply to the Question, having said "Earning capacity of invalidity pensioners: a survey by the Department to examine the effects of the earnings rule on invalidity pensioners", not be relevant to the question about which we are talking?

Mr. Deakins: To satisfy the right hon. Gentleman I shall get information about Survey 15 and the details and I shall see that the right hon. Gentleman and the hon. Member for Wallasey (Mrs. Chalker) are satisfied about it. It would be quite pointless for the Government to go through another exercise if an existing survey already produces information that would be appropriate.
The right hon. Gentleman's third point was about the uncertainties. I think that all of us agree, after our debates in Committee, that this is an area of great uncertainty. We are trying to narrow it down but, as has been pointed out, we


shall never be able to get complete finality on this matter. I welcome the right hon. Gentleman's recognition that it will be this Government that will be presenting the report in October 1978.

Mr. Patrick Jenkin: No.

Mr. Deakins: Perhaps I misunderstand the right hon. Gentleman.
This was the one amendment on which the Government were defeated in another place on this complex and partly controversial Bill. I must pay tribute to all the parties there, which have assisted the Government in getting the Bill through speedily with only one amendment that the Government did not want. I thank them for their co-operation in returning the Bill to us so quickly. I have in mind the timescale from a public expenditure point of view.
My hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) talked about the possible reduction of the top age limit. The figures that will be supplied in the report will enable us to give him the same information that we supplied in Committee. I cannot guarantee that the report will contain a paragraph on this matter but we shall be able immediately to make the updated information available to my hon. Friend and the House on this method of getting rid of the earnings rule.
I take the point made by the hon. Member for Braintree (Mr. Newton), but agree with the right hon. Member for Wanstead and Woodford that at present public expenditure considerations are paramount. The advantage of the report—I am making the best of something that the Government are having to accept—is that if public expenditure considerations are not as paramount in October 1978 as they are today and if the figures are more up to date and enable a much better estimate of the cost, it may be that the difference between the amount of public expenditure that we can afford to allocate to abolish the rule and the amount that is necessary will be so small that it will be easier for the House to see its way forward—I make no promises—to an immediate or eventual abolition along the lines put forward by my hon. Friend the Member for Islington, South and Finsbury.

Question put and agreed to.

Clause 11

MOBILITY ALLOWANCES FOR CERTAIN PERSONS ELIGIBLE FOR INVALID CARRIAGES

Lords amendment: No. 3, in page 11, line 42, at end insert"; or
(d) would have been, by virtue of any of the preceding paragraphs, a person to whom this section applies but for some error or delay for which in the opinion of the Secretary of State the person is not responsible and which is brought to the attention of the Secretary of State within the period of one year beginning with the date of the passing of this Act.

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
This amendment was introduced by the Government to meet a commitment given here on Report by the Minister responsible for the disabled.
Paragraphs (a), (b) and (c) of subsection (3) of Clause 11 define those beneficiaries who have reserved rights under the health service vehicle scheme and who may be allowed under the clause to switch, if they choose, to the new mobility allowance.
The Government believe that Clause 11, even without the amendment, covers all those beneficiaries who have reserved rights and who consequently are entitled to exercise the option to change over to the mobility allowance. Nevertheless, in view of the concern expressed during the earlier passage of the Bill and by the Joint Committee on Mobility for the Disabled that there may be deserving cases who would have met the condition, but for some error or delay for which they were not responsible, the Government agreed to put down the amendment giving the Secretary of State a safety net to catch cases which are brought to his attention within a reasonable time limit.
The amendment is wide enough to achieve this effect. It is purely beneficial and I ask the House to accept it.

Mrs. Chalker: I am grateful to the Under-Secretary of State for explaining the outcome of the little discussion that we had in Committee. However, before we welcome the amendment it is right to put on record the answer that I received from the hon. Gentleman's colleague the Under-Secretary of State who deals with


the problems of the disabled, on 21st March 1976.
I asked the hon. Gentleman how many people were likely to become disenfranchised by the change in mobility between 1975 and 1976. I had previously received the answer that 2,000 people annually might have become new beneficiaries under the pre-1976 vehicle scheme had the old scheme continued in operation. I felt that that was a rather small number and decided to ask the Question again a little later. However, before I had the opportunity to do so the hon. Gentleman said that he felt that 3,500 might be a better estimate. In fact, that is a better estimate of the number of people who might have had a vehicle but who did not because of the change in the rules.
The very purpose of the Question and answer and the subsequent answer underlines the necessity to have the safety clause in the Bill, although it has been resisted by the Government in the past. I am delighted that the Government should be introducing it on this occasion as a result of further discussions in another place.
This is a dramatic change, as it alters the way of life for many disabled people, giving them a chance to move around when otherwise they would be unable to do so. I hope that we shall always consider putting this sort of clause into our legislation, as it will save many of the appeals and difficulties with which we shall be faced if such a clause is not to be found in initiating legislation.
We welcome the clause.

Question put and agreed to.

Clause 12

AMENDMENTS OF SUPPLEMENTARY BENEFITS ACT 1976

Lords amendment: No. 4, in page 12, line 21, at end insert
(2A) Subject to subsection (7A) below, regulations under the preceding provisions of this section may be so made as to take effect from the commencement of the Supplementary Benefits Act 1976.

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker: With this, we are to discuss also Lords Amendments Nos. 5, 6 and 7.

Mr. Deakins: These amendments became necessary as a result of the judgment of the Court of Appeal in the case of Atkinson v. the Barnsley Supplementary Benefits Appeal Tribunal, which was delivered after the Bill had left us for another place. The aim of the amendments is, in brief, to provide statutory backing for the Commission's use of its discretionary power in the past—not just in its application to students—and to provide a firm statutory base for the continuation of its policies in the future.
The judgment of the Court of Appeal was to the effect that the Supplementary Benefits Commission has been in error in law in its past handling of claims from students and that it cannot rely on its existing discretionary powers to implement its long-standing policies towards students. The House agreed on Report that the Commission should continue to implement its traditional policies towards students, and inserted Clause 12(1) and (2), which will, after Royal Assent, give the necessary statutory backing. The present amendments introducing a new subsection 2(A) to Clause 12 contain a power to ensure that regulations made under Clause 12(1) and (2) may be made so as to cover past cases. This is to avoid having to look again at cases that have been settled since the Supplementary Benefit Scheme began 10 years ago, which would bring the Commission's current work on meeting urgent need to a halt. I should make clear the purpose of the new sub-section (7A), which is to ensure that the legislation does not have the effect of nullifying the judgment of the Court of Appeal in relation to the particular case which was before it.
The amendments also seek to deal with a general issue which arose in the judgment of the Court of Appeal to which I have referred. The court also ruled that the wording of the Supplementary Benefits Act was not such as to enable the Commission to use its discretionary powers in relation to classes of cases as distinct from individuals, and this has left the Commission in the position of having an extremely shaky statutory basis for a wide range of its policies and the payments it makes.
Paragraph 4(1) of the First Schedule to the Supplementary Benefits Act 1976, which consolidates a similar paragraph


in the 1966 Act, gives the Supplementary Benefits Commission power to increase or, in the case only of a supplementary allowance, reduce the benefit entitlement which would otherwise be arrived at, in order to take account of any exceptional circumstances. The Commission uses this power not only in relation to exceptional circumstances of an individual case but also in relation to categories of cases. Indeed, it is inevitable that discretion should be exercised in this way in such a scheme as supplementary benefit which deals with millions of claims a year. It would clearly be impracticable to consider each case individually.
Ever since 1966 the power has been used in many circumstances to increase benefit. I shall give two examples. The Commission awards substantial heating additions at standard rates and special diet addition of set amounts to fairly wide categories of claimants meeting specified criteria, such as illness or infirmity, or with accommodation that is difficult to heat. At the moment, over 1 million heating additions are in payment and there are about 300,000 additions for special diets. On the other hand, it has also been used on a much smaller scale to reduce or deny benefit to some categories of claimants whom it would be anomalous to support from public funds.
6.0 p.m.
As I have indicated, the Court of Appeal's judgment would lead to additional expenditure in some areas, possible hardship in others and a breakdown of confidence in the Supplementary Benefits Scheme. Urgent action has to be taken to restore the position to what the Commission had hitherto thought it was, and this is the purpose of our proposed subsection (6A).
It has been found necessary, as with the provisions relating to students, to ensure that this amendment has effect in relation to past cases, otherwise there is a real risk of old cases being reopened and so disrupting the work of local offices in trying to help people currently in need. This simply restores the situation to that which successive Governments have for many years thought existed. No claimant will suffer any detriment.
Consequential amendments to Clause 21 of the Bill ensure that the provisions embodied in these amendments shall come into force on the passing of the Act.

Mr. Patrick Jenkin: We come now to the latest chapter in what has been the very chequered history of the Government's intention to make sense of the provision for students during vacations. The process started on 23rd February with a Written Answer from the former Secretary of State for Education and Science, when he announced that, from the start of the new academic year which began last September, students would be treated as having part of their grants attributable to the Christmas and Easter vacations and that that would be switched from the summer vacation.
The Government tried to give legislative backing to that announcement when they published the Social Security (Miscellaneous Provisions) Bill before Christmas. It was in a form which aroused hostility from all parts of the House, for the simple reason that it proposed to disentitle students from supplementary benefit at all and to replace that entitlement with a hardship scheme to take care of the minority of students in special circumstances—those who were householders, had dependants or had to maintain flats during the vacation.
On Second Reading, however, we found that "There ain't no hardship scheme." It did not exist. There was no money, no administration and no provision for financing it. Furthermore a number of hon. Members, notably the hon. Member for Coventry, South-West (Mrs. Wise), asked forcibly what a hardship scheme would achieve that the Supplementary Benefit Scheme could not. After one of the most hard-pressed speeches that he can have made in his political career—I shall never forget the way in which he was hammered from all sides—the Minister for Social Security undertook to take the Bill away and look at it again.
As a result, a new clause in Committee reinstated the entitlement to supplementary benefit but provided that the parental contribution, even if not paid, should be treated as paid. That aroused some hostility. First, it was obvious that the Government were forgoing the savings that they had undertaken by introducing the clause in the


first place. Second, it appeared that the Department of Education and Science, none of whose Ministers was on the Committee, had played no part in the matter at all, apart from the former Secretary of State's original announcement. Altogether, the position appeared to be one of considerable confusion and conflict. Therefore the Committee rightly threw out the relevant subsection and the Bill was reported with that clause headless, as it were—lacking its main operative part.
On Report the Government sought to put the clause back, saying that it was essential if they were to give statutory backing to the SBC's practice of treating a parental contribution as though it were paid even if it were not. Some Government supporters still felt in difficulties, but the Opposition felt that that was the responsible thing to do.
We have all along accepted the view of the SBC, as expressed in paragraph 5.11 of its 1975 Annual Report, that it is not a proper function of the Supplementary Benefit Scheme to see to student support. We accept that and we hope that it is still the Department's long-term aim.
Then the Government lost yet another case before the courts. They have been very unlucky in their litigation—Laker Airways and Tameside, for instance. In this case, a 22-year-old law student took them to the Court of Appeal and single-handedly defeated the entire might of the Department of Health and Social Security. He established his entitlement to supplementary benefit on the footing that the Commission was not entitled—I must say this very carefully, because Mr. Atkinson wrote a letter to The Guardian setting out his case exactly—to take account of the parental contribution, and that it did not form part of the resources to which the Commission had to have regard in fixing a student's entitlement to benefit.
The Minister just now thanked all parties in another place for the speed with which they had dealt with this matter. I cannot reciprocate, because the Government have dealt with it in an astonishingly lackadaisical way. I shall not quote all the passages from Committee, but the Government made it clear that they had to get the Bill out of Committee by 1st February so that it could

become law in time for the new rule to operate from the start of the Easter vacation. We did not then know the outcome of the Atkinson case, but the Government wanted the statutory authority to start at that time.
We gave them the Bill out of Committee on 1st February, but it was not until 14th February—a whole week later than necessary—that it was considered on Report. After Report and Third Reading in this House, the House of Lords did not have its Second Reading debate until 3rd March—more than another fortnight—and the Committee stage there did not begin until 14th March, nearly another fortnight later.
From the time that the Bill left Standing Committee here until it went into Committee in the Lords, nearly six weeks was wasted when perhaps no more than two or two and a half weeks would have been necessary. As a result, students are lining up before the counters in supplementary benefit offices and doing what the Government did not intend them to do—claiming supplementary benefit. Moreover, they are claiming it on the basis of the Atkinson case, on the footing that the parental contribution cannot be treated as part of the resources if it is not paid.
We also know from what was said in The Guardian before Christmas that the Government had already sent out circulars to their supplementary benefit offices instructing them to deal with students on the basis of the existing practice—that the parental contribution should be treated as paid.
Therefore, we now have a yet further application, again involving retrospective legislation, to try to clear up the muddle the Government have got themselves into. The Government have got themselves tied to this problem because of their disaster before the Court of Appeal. A further factor, as the Minister made clear, is that the practice on which the SBC has been operating—of making rulings for whole classes of people—turns out to have no statutory backing. The Government must therefore put that right. Goodness knows how much money could be at risk if that were not done.
With our customary responsibility, our interest in the welfare of the public purse and our intention that everything is done which should be done, we will not oppose


the amendments. Once again, however, I cannot congratulate the Government on the way in which they and their Departments have handled this matter.
The handling of this matter has been shameful There has been total confusion from beginning to end because there has been real conflict between the interests of the Department of Education and Science, with its concern for students, and the Department of Health and Social Security, with its interest in the proper administration of the Supplementary Benefit Scheme. That is the real reason for the trouble, whatever might have been said by the Minister of State for Education and Science in a truly astonishing speech on Report. The Minister cannot look back on that speech with any pride.
The people who have been the losers are the normal clients of the Supplementary Benefits Commission—people who look to that Commission for their livelihood because they have no other means at their disposal. But they have had to queue up with students who should not be there, and their claims have been made more difficult as a result.
The Commission's staff had hoped that they would not be grappling with payments of supplementary benefits to students. We know that 73 per cent. of students in respect of whom the parental contribution is assessed do not get the whole or part of that parental contribution. That is a high proportion of students, and as a result of the Atkinson case these people are now entitled to go to the Supplementary Benefits Commission and draw benefits on the basis that the notional contribution cannot be treated as part of their resources. This is not the happiest chapter in the affairs of either the Department of Health and Social Security or the Department of Education and Science.
I urge the Minister to give us two clear, categorical pledges. The first is that he will go back to the Department of Education and Science and tell his right hon. and hon. Friends there that he will not put up with this sort of thing again. The Department must now produce a proper scheme to make sure that students do not suffer hardship in

the vacation, but it is no part of the functions of the Supplementary Benefits Commission to do this. The Department of Health and Social Security must make that clear to the Department of Education and Science.
The second pledge is much more immediate. The Government have given an indication that they want the Bill finished before 7 p.m., when we are to consider opposed private business. The Bill will then return to the Lords and the matter will be finally disposed of, and Royal Assent will be given later tonight or tomorrow. We will see that this is done. Is it the intention of the Government, the minute Royal Assent is through, to make sure that from that moment their intentions are implemented? The great generality of students should not be entitled to clog up the counters of the Supplementary Benefits Commission.
We are already half way through the Easter vacation, and it is up to the Government to salvage something from the wreckage. Public money should cease to be paid out in this way. If the Government can give those undertakings on both those fronts, we could perhaps allow this Lords amendment to go through.

6.15 p.m.

Mr. Deakins: I think that the right hon. Gentleman has given, even for him, a rather biased summary of the progress of the Bill and of this particular provision. He has mixed up what happened in Committee on the clause relating to supplementary benefits—Clause 13(1)—with Amendment No. 63, which was voted down by the Opposition. Amendment No. 63 had nothing at all to do with withdrawing supplementary benefit from students. It was the guts of the proposal that we brought back at Report stage and which went back into the Bill as Clause 12(1) and (2).
The right hon. Gentleman knows that I am not responsible for what goes on in another place. I know that their rules of procedure are rather different from ours because of the number of days that have to elapse between the various stages of Bills.
I hope that we will be able to tidy this up once and for all. The Court of Appeal has helped to get us into this position. We


had no idea when the Bill was drafted that this particular judgment would come up at this particular time. It is just as well it did, because it has enabled us to take cognisance of that decision and to put the law back to the state in which we thought it was. In this matter I speak for all Governments—we all thought that the law was different from what it actually was.
There was a certain amount of confusion in Committee and we did our best to put it right. Talking about the contributions of specialists in education to this debate, a prime example was the very long speech in Committee from the hon. Member for Ripon (Dr. Hampson) who joined in our deliberations.
Certainly we shall be, and are, in touch with the Department of Education and Science. We are in close contact with that Department over the student grants system and the amendments that will be needed because of the provisions of the Bill.
The second provision is more urgent. Claims determined before the Bill becomes law, and the regulations made under it, will be dealt with in accordance with the law as defined by the Court of Appeal—£4 disregard will be given, and no account will be taken of parental contribution when satisfactory evidence is produced that that has not been made. All claims determined after the Bill becomes law and the regulations have been made will be dealt with as it is then—normally no disregard, and parental contribution will be taken into account. Exceptions will be made in the case of severely disabled students and lone parents, who will get a disregard of £2 on their grant and the assessed parental contribution will not be taken into account unless it is made in cash or kind.
The regulations will be made immediately after Royal Assent. The right hon. Gentleman is in possession of information that I do not have. I have no idea when Royal Assent will be given, but I assure him that the regulations will be made as quockly as possible after Royal Assent.

Question put and agreed to.

Lords Amendments Nos. 5, 6 and 7 agreed to.

New Clause D

CALCULATION OF GUARANTEED MIMIMUM PENSIONS PRESERVED UNDER APPROVED ARRANGEMENTS

Lords amendment: No. 8, in page 17, line 24, at end insert new Clause D:
D.—(1) Where an occupational pension scheme ceases to be contracted-out and guaranteed minimum pension rights or accrued rights to guaranteed minimum pensions under the scheme are subject to approved arrangements (as defined in section 44 of the Pensions Act for the purposes of subsection (2) of that section) for their preservation, then, except in such circumstances as may be prescribed, section 35(5) of that Act shall have effect, unless the prescribed person otherwise elects in the prescribed manner, as if the following words were added at the end thereof: "except such an order made in any of the tax years comprised in the period of five years ending with the tax year in which the scheme ceases to be contracted-out and as increased by 12 per cent. for each of those five tax years except any in which an order under section 21 of this Act was made which did not relate to the factor and any in which such an order was not made and would not have related to the factor if it had been made".
(2) Regulations may provide that subsection (1) above shall have effect with prescribed modifications in relation to a scheme which, immediately before it ceased to be contracted-out, contained provisions authorised by section 35(7) of the Pensions Act.
(3) In this section expressions used in Part III of the Pensions Act have the same meanings as in that Part.

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
The effect of this amendment is that, where a scheme ceases to be contracted out, the earnings factor from which guaranteed minimum pensions will be calculated may be revalued, subject to prescribed exceptions, at 12 per cent. a year for the five-year period immediately preceding the cessation, as an alternative to revaluation by reference to the rise in earnings generally. This concession in no way diminishes a contributor's combined pension rights from the State and occupational pension schemes.
The concession already exists for employers who, on cessation of contracting out, would decide to discharge their liabilities for guaranteed minimum pensions by paying premiums into the National Insurance Fund in order to buy back into the State scheme. Section 44(6) of


the Pensions Act permits the premiums to be calculated on the assumption that the pension rights so bought were to be revalued on this basis.
This amendment will make the concession similarly available where, instead of buying back into the State scheme, the guaranteed minimum pensions will be preserved under arrangements approved by the Occupational Pensions Board, other than by transfer of rights to another contracted-out scheme. The regulation-making powers in the amendment are intended to be used principally to ensure that a similar concession may be available in respect of employees who had left the employment with preserved pensions before the scheme ceased to be contracted-out.
Earlier this year, in Committee in this House, we resisted Opposition amendments which were designed to grant this concession and in doing so referred to the extra cost which would fall on the National Insurance Fund. I refer to the Official Report for Standing Committee A on 27th January 1977, at cols. 511–524. In the light of further advice and the new points raised by the pensions interests, we now accept that the net long-term cost would, so far as one can reasonably foresee, be unlikely to amount to a serious and substantial additional commitment except in the sort of very severe inflationary situation which would probably call for exceptional measures in any event. The potential cost is still a very relevant consideration, but we feel that the overall balance of considerations justifies this further concession.
This concession, in effect, closes the last remaining open-ended commitment for employers and underlines the partnership between State and occupational pension schemes. It has, of course, been welcomed by the pensions organisations.
There is one additional point I wish to make. There must be a limit to the extent to which the financial balances between State and occupational burdens are adjusted against each other. The amendment must be regarded as reaching that limit.

Mr. Patrick Jenkin: Once again we are happy to acknowledge that the Government have yielded to wisdom and

accepted the amendment that we moved in Committee. The Minister was kind enough to say that I had argued the matter powerfully. However, I was given a dusty answer in Committee, but obviously that power continued to work and the Government have been persuaded that it is right. I should like to thank the Minister for what he has done.
The importance of the amendment is that it underlines the concept of the partnership between the public and private sectors and the fact that a large number of schemes will involve contracting out. That was always envisaged. The schemes will cover 8 million workers, but time is marching on. We have debated the effect of pay policy on pension scheme improvements. We have now had an indication from a number of the pensions interests that the method by which they are expected to apply for contracting out is now obscure. I have tabled a Question on this subject, but I do not know whether the Minister has seen it.
There is now criticism that people do not know what the Occupational Pensions Board will require. That is one reason why so few applications have been made. But I repeat that time is running out. There is to be a long consultation period, application must be made to the Occupational Pensions Board, and there must be time for the matter to be considered and also time after the certificate is given for the necessary changes to be made and for the new scheme to come in. It must all be done by the end of the year.
I am glad that the Secretary of State for Social Services has now come into the Chamber. He always comes in at the important points. I must tell him that this matter involves the impact of pay policy and contracting out on pension schemes. I know that he and his Department are familiar with these matters—indeed, they are tearing out their hair in frustration. They know that their policy is in serious danger because of the effect of pay restrictions in phase 2, and the slowness of the negotiations in phase 3 has been such that firms have not taken advantage of this proposal. The Government have repeatedly said that they wish to back the partnership in pensions, yet it is clear that a large number of firms that would like to contract out still do


not know whether they will be able to put such proposals in operation.
I hope—perhaps this may be conveyed to the Chancellor of the Exchequer, whether through the joint consultative committee or otherwise—that even now the Chancellor will be able to say something about this subject in his Budget Statement. People must know where they stand. It may not be possible for the Government to give a categorical assurance on a quantified limit or anything of the sort, but we must know within a matter of weeks how far firms will be allowed to improve their schemes to make it worth while for them to go to the trouble of contracting out and of making a reality of the partnership so often underlined by the Government. I know that it is the wish of firms to make this a reality. A determination was shown during the proceedings on the 1975 legislation that a reality should be made of that partnership. We know that that is the right way to proceed. But the Government are currently frustrating that aim, and it is up to them to put matters right. I hope that in the Budget Statement there will be some indication of that attitude.
This provision is immensely valuable. As the Minister said, it closes the last open-ended commitment. However, it will be as dust and ashes unless the Government can give the pensions movement in the private and public sectors—in nationalised industries and private companies—freedom to negotiate with the unions improvements in schemes which can operate from April 1978.

Question put and agreed to

Clause 18

OTHER MISCELLANEOUS AMENDMENTS

Lords amendment: No. 9, in page 18, line 30, after "Act" insert:
(which relate to a person whose service is contracted-out employment ceases before he attains the relevant scheme's normal pension age)

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): With this we may take Lords Amendments Nos. 11 and 12.

Mr. Deakins: These are purely consequential drafting amendments necessitated by subsection (7) of Clause 18, which was incorporated in the Bill on Report in this House. When the Government accepted that amendment, we did so on the understanding that it might be necessary to make further consequential amendments. These amendments are required.

Question put and agreed to.

Lords amendment: No. 10, in page 18, line 32, at end insert—
(7A) In section 40(3) of the Pensions Act, after the words "the rule has taken effect" there shall be inserted the words "except that the rule may also accord priority, on a winding up occurring after an earner has attained normal pension age, to liabilities of the scheme in respect of pensions and other benefits to which he will be entitled on ceasing to be in employment or to which the earner's widow or widower or any dependant of the earner's will be entitled on the earner's death".

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
Section 40(3) of the Social Security Pensions Act 1975 provides that for an occupational pension scheme to be contracted out it must contain a rule whereby any liabilities of the scheme in respect of certain items are accorded priority on a winding-up. These liabilities include guaranteed minimum pensions, equivalent pension benefits under former legislation, State scheme premiums, and pensions and other benefits in respect of which entitlement to payment has already arisen. The effect of this amendment is to add optional extra categories of pension to the existing categories.
It has to be admitted that some confusion has arisen over what is meant to be covered by Section 40(3)(c) of the Act. It seems to have been originally intended that the priority liabilities should among other things, include postponed pensions and other benefits which would have been in payment but for the fact that the beneficiary had remained in employment after reaching normal pension age. Legal advice strongly suggests, however, that such pensions to the extent that they exceed the guaranteed minimum pension are not in fact included in the priority categories in Section 40(3). Moreover, it appears that certain schemes have been under the belief that prospective widows'


pensions where the earner has qualified for his own pension would also be in the priority categories, and have altered their rules accordingly. Certainly the Government would not want to disturb any rule giving priority to such a widow's pension.
At this stage, it is clearly undesirable that schemes which have brought their rules into conformity with Section 40(3) as it now stands should be required to amend their rules yet again. It is equally undesirable that schemes which have, in all good faith, extended their priorities to conform with what they understood were the Act's priority requirements should be required to amend their rules yet again so as to reduce their priority categories. This amendment therefore gives schemes the option of including the extra categories as priority ones, so that all schemes which have priority rules either conforming with Section 40(3) as it now stands or including any or all of the extra categories specified in the amendment will satisfy the priority requirements for contracting out.
The Government are indebted to the pensions organisations, and particularly to the Life Offices Association, for their help in bringing the difficulties to notice and in helping to identify the sort of corrective action which would be most likely to meet the general needs of the situation. I accordingly commend the amendment to the House.

6.30 p.m

Mr. Patrick Jenkin: Once again the Government have been wise in dealing with this matter in a sensible manner. It may seem strange for one to say that, but obviously it is a highly complicated matter. The fact is, however, that the amendment removes the need for much further complication by the private pensions interests outside. I welcome that.
Unlike the Minister's noble Friend, Baroness Phillips, in another place, I do not propose to use this amendment as an occasion for asking a question about the cohabitation rule. That may be an interesting subject but it does not seem to be wholly relevant, and I shall save the Minister the embarrassment of having to reply to such a question.

Question put and agreed to.

Lords Amendments Nos. 11 and 12 agreed to.

Clause 18

OTHER MISCELLANEOUS AMENDMENTS

Lords amendment: No. 13, in page 20, line 14, at end insert—
(12A) In section 47 of the Pensions Act, in subsections (1)(b) and (8)(b), for the words "state scheme premium" there shall be substituted the words "contributions equivalent premium".

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
The Government introduced this amendment so as to make more precise the intended scope of Section 47 of the Pensions Act. At present, this section would enable an employer to recover part of the cost of paying a State scheme premium from any refund of occupational scheme contributions an employee may receive.
Normally the contributions equivalent premium would be the only type of State scheme premium on which the question of refund of employees' occupational scheme contributions would arise. It is recognised, however, that in some cases such refunds can arise in connection with other types of State scheme premium. It had been suggested that, under the terms of the section, the employer would have a similar right of recovery when he paid premiums such as a limited revaluation premium or an accrued rights premium. This was never intended, and in fact would result in some very anomalous situations.
The intention of this amendment is thus to make it clear that the employer's right of recovery under Section 47 of the Act relates solely to contributions equivalent premiums.

Question put and agreed to.

Lords Amendments Nos. 14 and 15 agreed to.

Clause 21

CITATION, COMMENCEMENT AND EXTENT

Lords amendment: No. 16, in page 22, line 25, after "7" insert
12(1) to (2A), (6A) and (7A), (Retrospective amendment of Supplementary Benefit Act 1966), 13".

Mr. Deakins: I beg to move, That this House doth agree with the Lords in the said amendment.
The effect of the amendment is to add subsections (1), (2), (2A), (6A) and (7A) of Clause 12, and also Clauses 12A and 13 to those provisions which come into force on the passing of the Act.
In moving the amendments to Clause 12 and the new clause which follows it, I explained why the provisions relating to students and to the Supplementary Benefits Commission's discretionary powers are wanted on Royal Assent. The House will not, I am sure, wish me to go over that ground again.
This amendment also, as I have said, brings Clause 13 into force on Royal Assent. That clause provides part of the powers under which regulations for the recoupment of benefit from industrial tribunal awards are to be made by the Secretary of State for Employment. Since it is intended that the regulations should operate from May 1977, it is desirable that Clause 13 should be brought into force on the passing of the Act so that there shall be adequate time for their making, laying and bringing into operation.

Mr. Patrick Jenkin: The House should recognise that this again is a retrospective clause in the sense that it makes an Act apply right back to 1966 and to the subsequently renamed Supplementary Benefit Act 1966. I shall not go over the ground that I covered earlier, but I must say that it is not satisfactory that we should be confronted with this kind of retrospective legislation, necessary though it may be.
I have spent much of my time in the House dealing with fiscal legislation such as Inland Revenue and Income Tax Acts and annual Finance Acts. In the last 15 months I have been dealing with social security legislation, and over the last four months I have been dealing with this Bill in particular. I am very struck by the similarities and by the contrasts. I hope that Labour Members will not take it amiss if I say that I think there are a great many fewer slips 'twixt cup and lip in the Inland Revenue than we have found even in the limited sphere of this legislation. The Inland Revenue has for years been dealing with a substantial professional body outside which has made

it its business to examine with a fine-tooth comb, Finance Bills and Finance Acts, and the regulations and orders which come under them, in order to make sure that in advising clients it takes full account of all the provisions that it is able to use for the clients' benefit.
As a result, what one might describe as a creative tension has existed for many years between the experts in the Inland Revenue and the experts in the professions outside. They have made sure that the causes for major mistakes are kept to very few indeed.

Mr. Orme: There is an annual Finance Act.

Mr. Jenkin: That is true, but the point I was making is that there is no such comparable tension between those who are concerned with the receipt of social security benefits and those who are concerned with the legislation within the Department. It seems to me that this is of some importance, because the result has been, first, that we have had, if anything, more complexity and more obscurity in this legislation than exists in the Income Tax Acts. It also means that there is no other person outside looking at the legislation, or even at the draft legislation, who is able to pinpoint the difficulties and bring them to our attention.
Of course, if there were such a person it might well be that one would have to have an annual Bill. But is that not perhaps better than finding ourselves passing legislation retrospectively, going back for more than 10 years, in order to cover up mistakes that have been unearthed and to close loopholes that have been discovered?
I am in no way criticising those who are dealing with an immensely complex branch of the law. I have had that complexity impressed on me in no uncertain way over the last four months, as, I suspect, has the Minister. We have had to grapple with this legislation, and I have been both impressed and depressed by its complexity. I wonder whether there is not a rôle for some of the bodies outside similar to the rôle in which the accountancy profession sees itself with regard to the Inland Revenue. If so, we might have ended up with better legislation, because loopholes of this kind would not have been allowed to occur.
There is now a very happy relationship between the accountancy profession and the Inland Revenue. Discussions take place regularly, and there are many occasions when the profession has saved the Revenue from mistakes which it would otherwise make. I say no more than that there is something here which needs to be examined. We want to try to make sure that we can secure some of the creative tension existing between those outside the Government and those in the Department so that we can avoid some of the difficulties in which we have found ourselves.
This is the last amendment with which we have to deal. It covers the clauses that have been inserted to reverse the judgment in the Atkinson case. I read in The Times today that judgment has been reserved in the Metzger case. I also read:
The Budget is not now expected to contain an announcement about the next increase in pensions, although the Chancellor of the Exchequer is likely to refer to the Government's legal obligation to raise them in November.
The Metzger case concerns the question of whether the Government broke the law last year when they failed to uprate pensions by the full amount of the rise in prices between April 1975 and April 1976. That is to be tested in the courts, and we are told that judgment has been reserved until Budget Day.
In those circumstances, I can well understand that the Government are a little hesitant about making a new announcement on Budget Day when a High Court judge may be giving judgment that what the Chancellor announced last year was illegal. I suspect that this year the announcement will be based on prices over the 12 months from November to November, but Pat Healy said in The Times today:
Although the Chancellor is not expected to announce the new rates on Tuesday it is

understood that the Government has decided to forecast ahead again this year unless judgment is given against it. That would mean measuring the way earnings and prices have risen since last November, and forecasting how much they would move by November this year.
Because the Government hopes to use the forecasting method again, it has decided to leave work on the review of the level of benefits until the last possible moment so that the latest figures can be included.
I do not object to that. It would seem to me to be sensible. If the Government have managed to speed up the process between the announcement of the increases and the date when they can become payable, that is a good thing, which we welcome. If they are to forecast ahead, the shorter the period ahead the better, because the greater will be the certainty that can be achieved and the greater the accuracy that can be applied to the increases.
I merely mention that as yet another example of how we may find in an annual Finance Bill that the Government have to say "Once again we have boobed. We have been overruled by the court, and there must be retrospective legislation"—such as the new clause. I must not comment, because judgment has been reserved, but as a matter of politics I hope that that will not be so. The mistake was not in the increase but in giving a pledge and then allowing inflation to run away so that it became totally impracticable to honour that pledge. However, that is a matter that we shall be able to examine on another day.
I should like to take this opportunity to thank Ministers for their very courteous replies on all the amendments. We accept this amendment, with its retrospectivity, although reluctantly, for the reasons I have given.

Question put and agreed to.

Lords Amendment No. 17 agreed to.

SOCIAL SECURITY

6.44 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I beg to move,
That the Family Income Supplements (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved.
I understand that it will be for the convenience of the House, and particularly hon. Members who take an interest in these matters, if we discuss in the same debate all the other motions relating to social security, as follows:
That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Regulations 1977 (S.I., 1977, No. 342), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Amendment Regulations 1977 (S.I., 1977, No. 417), dated 7th March 1977, a copy of which was laid before this House on 11th March, be annulled.
That an humble Address be presented to Her Majesty, praying that the Pneumoconiosis, Byssionosis and Miscellaneous Diseases Benefit (Amendment) Scheme 1977 (S.I., 1977, No. 380), dated 4th March 1977fi, a copy of which was laid before this House on 11th March, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Security Benefit (Dependency) Regulations 1977 (S.I., 1977, No. 343), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.
That an humble Address be presented to Her Majesty, praying that the Family Income Supplements (General) Amendment Regulations 1977 (S.I., 1977, No. 324), dated 1st March 1977, a copy of which was laid before this House on 7th March, be annulled.
That an humble Address be presented to Her Majesty, praying that the Social Security (Industrial Injuries) (Benefit) Amendment Regulations 1977 (S.I., 1977, No. 341), dated 1st March 1977, a copy of which was laid before this House on 11th March, be annulled.

Mr. Graham Page: On a point of order, Mr. Deputy Speaker. When the Lord President announced the business on Monday he mentioned these regulations but did not mention any of the Prayers now on the Order Paper. Therefore, Back Benchers had no warning that the Prayers were to be taken today until they picked up their Order Papers this morning. It is a little unfair on those who take an interest in these matters not to have more warning.
There is a more serious point arising from this. Because the Prayers have been rushed on to the Order Paper there is not the usual rubric saying that the Statutory Instruments have not been dealt with completely by the Joint Committee on Statutory Instruments. There is no Standing Order that the rubrics should appear, but we see on the Order Papjer in relation to the EEC orders that the position of the Joint Committee is duly noted.
The Joint Committee has not completed its consideration of Statutory Instrument 1977 No. 342 and Statutory Instrument 1977 No. 417. According to convention, that should have been noted on the Order Paper. The Select Committee has asked for evidence from officials of the Department on those two Statutory Instruments. It is very inconvenient if we are to debate them without knowing that evidence and without the House having any report from the Joint Committee on those two Statutory Instruments. The question to the Department is whether those Statutory Instruments may be ultra vires in certain respects.
The Joint Committee has not completed its consideration of Statutory Instrument 1977 No. 380, but the Department is not concerned there; it is merely a matter of further advice from Mr. Speaker's Counsel. However, these matters should have been noted on the Order Paper, according to convention. I wish to call attention to the omission from the Order Paper of what we have become accustomed to calling "the rubrics".

Mr. Deputy Speaker (Mr. Bryant God-man Irvine): I am sure that the Minister and the House have noted what the right hon. Gentleman has said.

Mr. Deakins: I apologise to the right hon. Gentleman for the omission of the rubric. I do not know the reason. I do not deal with these matters, which are not a direct responsibility of my Department.
With regard to the ultra vires point raised by the right hon. Gentleman, I shall need to refer to those who know about these matters to satisfy myself whether the Statutory Instruments in question are in order.

Mr. Patrick Jenkin: Further to the point of order,


Mr. Deputy Speaker. I hope that it will be possible for the question of the announcement on Monday to be drawn to the attention of the Leader of the House. It was known—it had been made known through the usual channels—that it was the Opposition's wish to take all the prayers together, because the whole lot are related to child benefit, when the FIS regulations were taken. We indicated that we wanted the debate on the Floor of the House, and not upstairs.
I hope that note will be taken that what has happened is very unhelpful for hon. Members. I was not in the House for the statement on Monday, but I assumed that all this would have been said. I and my colleagues who are principally concerned knew about the matter because we had made the request, but it is inconvenient for hon. Members not to know when many prayers are to be taken with the affirmative motion, so that they have time to prepare themselves to take part in the debate. It is important that this should not happen again.

Mr. Graham Page: Further to the point of order, Mr. Deputy Speaker. The Joint Committee meets on Tuesday, and if the announcement had been made on Monday I am sure that the Department would have put itself out to send officials to give evidence then, so that the House might know by today the answers to the points that the Committee wanted to put to the officials. The problems could have been solved if that announcement had been made on Monday.

Mr. Deakins: I shall draw the attention of my right hon. Friend the Leader of the House to the remarks of the right hon. Member for Crosby (Mr. Page) and the right hon. Member for Wanstead and Woodford (Mr. Jenkin).
In order that we may have a reasonable discussion—we are considering seven regulations altogether—it may be helpful to indicate how I intend to proceed.
The central issue of this debate must be the draft Family Income Supplements (Computation) Regulations, together with the Family Income Supplement (General) Amendment Regulations 1977, which are needed to complete the modifications to the FIS scheme in time for the beginning of the child benefit scheme on

4th April. The remaining five sets of regulations I will come to later, and will attempt to deal with them all together. Before mentioning some of the details of the computation regulations, there are two preliminary points that I ought to make.
The first is that FIS was conceived by the last Conservative Government as a simple scheme, and we propose to keep it so. Nevertheless, the introduction of a universal benefit such as child benefit, coupled with a gradual withdrawal of child tax allowances, is bound to have an effect on the formula for the calculation of FIS, and I know that this has led to confusion in some quarters. I have therefore prepared a brief explanation of the FIS rules and how we propose to apply them in the child benefit era. Some hon. Members may already have copies of this note; further copies can be obtained from the Whips' Offices. I hope that hon. Members who wish to follow the proposed changes as I describe them will find it easier to do so by reference to this note.
The second preliminary point is that at present the prescribed amounts and maximum payments are specified in Sections 2 and 3 of the Family Income Supplements Act 1970, as amended by computation regulations at each FIS uprating. Schedule 4 to the Child Benefit Act 1975 amends the Family Income Supplements Act so that, following the introduction of the child benefit scheme, the prescribed amounts and maximum payments are to be specified in regulations, subject to two conditions. The only one that I need mention is that the prescribed amounts, which will apply from 5th April, must not be less than the basic prescribed amount immediately before the commencement of the child benefit scheme. In other words, any changes in the FIS formula needed to take account of the introduction of child benefit could not include a reduction in the basic prescribed amount of £39.

Mrs. Lynda Chalker: Will it be possible in some way to publish the note—which the hon. Gentleman kindly let a number of us have before the debate—on the effect of FIS on child benefit? I feel that it will not be clear to other hon. Members who are trying to answer the inquiries of their constituents about


exactly what is happening unless we can have that statement, which is five or six pages long and has three detailed tables at the back, made fully available to hon. Members and not just left in the Whips' Offices, where, with respect, papers tend to get lost. There are also many people outside the House who need to make these calculations in order to advise their clients. They do not have access to our Whips' Offices. Can the hon. Gentleman make some arrangement for publishing the paper in full?

Mr. Deakins: I take the point. I am not sure about publication as a pamphlet or booklet, and I am not certain that that would necessarily be desirable in any case. But I undertake to do what one perhaps should already have done—to place copies in The Library as well as in the Whips' Offices. This has come at rather short notice, and we prepared the document only fairly recently.
As the House knows, I am not adverse to sending things to all hon. Members. I have just sent something about the married women's option personally to all 635 Members, and I must forbear from undertaking a similar task again at least until my arm has recovered from the experience. But I take seriously the point made by the hon. Lady and, with my officials, I shall examine what further publicity can be given. I cannot promise to publish a pamphlet, but I hope that putting copies in the Library, or making more copies available, will be sufficient.
The hon. Lady mentioned outside bodies. This is not a secret document. I would have thought that either the major outside bodies could ask for it or, if the hon. Lady likes, we could send it to those most interested. I think that that would meet the point that she has made.

Mrs. Chalker: I am thinking of bodies such as Gingerbread and the Child Poverty Action Group, which have expressed considerable concern about what is happening over upratings. If they could be sent the paper forthwith, it would save a lot of correspondence that the hon. Gentleman will have to answer.

Mr. Deakins: I take the point. If we can confine the circulation of the document

to the major organisations which we know have queries, I think that that will be helpful.
These draft computation regulations specify the prescribed amounts and maximum payments that will apply from 5th April. Regulation 2 specifies that the basic prescribed amount will be £39, the same as it is now, and that the step will be reduced by £1, from £4·50 to £3·50. I shall explain later why we are proposing this reduction, but suffice it to say now that it is bound up with the disregard of child benefit as income for FIS, which is effected by Regulation 2(1) of the Family Income Supplements (General) Amendment Regulations 1977. Regulation 3 of the computation regulations provides for the maximum payment for a family with one child to continue to be £8·50, with an addition of 50p for each child after the first.
Hon. Members will have noted that Regulation 4 of these regulations also provides for an increase of £2·50 in the basic prescribed amount from 19th July; I shall come to the July proposals in a moment. But first let me deal with the changes we propose to make in April.
The first change is that, as explained in paragraph 10 of the note, child benefit and child benefit increase will not count as part of the family's gross income. The second change is that the step in the prescribed amount will be reduced by £1—from £4·50 to £3·50. Examples of the two calculations, one as it is now, the other as it will be from April, are given in the note—examples A and B, respectively. The effect of these changes on FIS awards current in April is set out in tables 1, 2 and 3 of the note. Hon. Members will see that there will be some small increases in the levels of these awards.
The overall effect of the FIS, child benefit and child tax allowances changes in April for tax-paying families is set out in tables 4, 5, and 6. I hope that these tables in particular will have demonstrated to the right hon. Member for Wanstead and Woodford how the figures that he mentioned in the child benefit debate on 9th February are derived.
Ideally, families on means-tested benefits should break even when child benefits are introduced, since we do not wish to


reduce the overall level of support that these selective benefits give to the poorest families. But, in reviewing FIS—and this applies throughout the whole complex of means-tested benefits—our aim has been to ensure as far as practicable that the improvement in universal benefit does not leave those already dependent on means-tested benefits actually worse off at the changeover point.
I know that this aim is fully shared by Opposition Members—certainly they have made much of it at various times. For example, in the debate on child benefit regulations on 30th July 1976 the right hon. Member for Wanstead and Woodford was very concerned about the position of people who might be worse off, and in the same debate the hon. Member for Rushcliffe (Mr. Clarke) said:
There will have to be amendments to the regulations and a change in the basis upon which FIS, rate rebates and rent allowances are assessed. I hope, therefore, that the Minister of State will confirm that the Secretary of State is not just saying that he will look at these things, but that action will actually be taken by the Government to make sure that no one is worse off next year. If we cannot have that, and if the Minister of State is unable to tell the House that no one will be worse off next year if he is in the FIS bracket, the Government scheme is a disgrace, remains a disgrace and will be a disgrace

when it is introduced."—[Official Report, 30th July 1976; Vol. 916, c. 1145.]
But the right hon. Gentleman has also pressed upon us the importance of preserving the principle that improvements in universal benefit should reduce dependence on means testing.
The Government share this view—indeed it is embodied in the very concept of the child benefit scheme. But the right hon. Gentleman appears to think that the two aims can be achieved simultaneously and in full. Given the complex structure of the various means-tested benefits that we have inherited, this cannot be done, but our proposals do secure this result as far as is practicable.
FIS is at the heart of this complex, partly because it is a passport to certain other means-tested benefits, such as free school meals, free milk and vitamins. The solution that we have adopted here is to disregard child benefit and make the necessary offset by reducing the step in the prescribed amount. That deals with the core of the problem—

It being Seven o'clock, and there being Private Business set down by The CHAIRMAN OF WAYS AND MEANS, under Standing Order No. 7 (Time for taking Private Business), further Proceeding stood postponed.

MERSEYSIDE PASSENGER TRANSPORT BILL (By Order)

Order for Second Reading read.

7.0 p.m.

Mr. Eric Ogden: I beg to move, That the Bill be now read a Second time.
The purpose of the Bill is to enable urgent and difficult decisions about public transport on Merseyside to be made by the people of Merseyside, for the people of Merseyside, in and on Merseyside, not 200 miles away in Westminster or Whitehall.
The Merseyside County Council and the Merseyside Passenger Transport Executive have the responsibility for operating public transport services on Merseyside. These include bus services, the ferries, rail links, the loop line and liaison with British Rail and the airport authority. These are no easy responsibilities at any time, and they are particularly difficult at times of severe restrictions on local and national expenditure.
It is estimated that the operation of the river ferries costs the Merseyside PTE about £1 million more per year than the income from the ferries. The loss of income to the transport authority caused by the 15 per cent. or so of bus passengers who deliberately do not pay the full authorised fares for bus journeys is estimated to be a further £2 million per annum. The Bill proposes—not disposes—means to enable the Merseyside PTE and the Merseyside County Council to attempt to deal with these losses of at least £3 million a year. That is no small sum.
The Mersey river ferries have a long honourable and lively history, and the rights of ferry across the Mersey, particularly between Liverpool and Birkenhead, have origins that are centuries old. The Woodside ferry originated under a Royal Charter granted to the monks of Birkenhead. I do not know whether any monks still live in Birkenhead—

Mr. Robert Parry: They are still there.

Mr. Ogden: I am grateful to my hon. Friend for his intervention. Those foundations are worth preserving. The charter

was granted to the monks of Birkenhead Priority in 1330. The charter referred to
the right to ferry over the arm of the sea for men, horses and goods with leave to charge reasonable tolls.
The Woodside ferry franchise passed through many different hands until invested in the commissioners for the township of Birkenhead in 1842. It was passed by the Birkenhead Corporation to the Merseyside PTE in 1969.
The Wallasey ferry has been in existence at least since 1541 and possibly longer. The Wallasey Improvement Act 1842 authorised the Wallasey Corporation to acquire the franchise, which it did in 1862. It took 20 years because the people like to make a proper job of it on that side of the river, as we do on ours. Those rights were passed to the Merseyside PTE in 1969.
The ferry services prospered and grew to meet the social and economic needs of the time. Over the years, eight ferries have been operated from various points on the Mersey. From the most seaward point, there was the New Brighton to Pierhead ferry, which was closed in 1971, with the consent of the Secretary of State, under the Wallasey Corporation Act, 1852. The Egremont ferry was closed in 1941. The Seacombe ferry is still operating, but no vehicle transport has been carried since 1947 and there has been no night service since 1962. The Woodside ferry is still operating but there has been no vehicular traffic since 1941 and no night service since 1956.
The Rock ferry was abandoned in 1939, the New ferry was abandoned in 1922 and the Eastham ferry was closed at the turn of the century. There was another ferry which I think would be of particular interest to my hon. Friend the Member for Liverpool, Garston (Mr. Loyden), and this was Job's ferry, a rowing boat service between Garston, my hon. Friend's constituency, and a point on the other side of the river close to the present Bromborough power station.
The ferries prospered with the growth of the ports and cities of the Mersey Estuary. Their heyday was between 1880 and 1910. Even in 1955–56 10½ million passengers used the Seacombe ferry, which made a profit of only £2,000. By 1975–76 there were fewer than 2 million passengers using the service and the loss


was £477,000. The Woodside ferry carried 8 million passengers in 1955–56 but lost £60,000, and in 1975–76 it carried only 1½ million passengers, at a loss to the executive and the authority of £418,000.
The reduction in demand for ferry services was caused not by any dislike of the ferries but by alternatives becoming available. These included the Mersey Railway, opened in 1885, the Queensway road tunnel, opened in 1934, the Kings-way road tunnel, opened in 1971, and the almost-ready new Merseyside loop line and the rail link that will have an even greater effect on demand for ferry services. The new loop link will provide the largest underground rail link outside London and the most modern in Europe.
I have always been fascinated by the ferry boats. The names of the ferry boats have been a roll call of honour, the pride of many generations. Perhaps my earliest memories—which probably go back to a time before my hon. Friend the Member for Liverpool, Scotland Exchange (Mr. Parry) and the hon. Member for Wallasey (Mrs. Chalker) were about—are of going from Pierhead to New Brighton and seeing that most dangerous of men, the one-legged diver of New Brighton, who used to collect halfpennies and pennies. This is part of our heritage and of all our traditions.
In recent years the "Leasowe", the "Egremont" and the "Royal Daffodil" have all been decommissioned and sold. Today the Woodside and Seacombe ferries are operated by the gallant ladies the "Mountwood", the "Overchurch" and "Woodchurch". The "Royal Iris" is still in commission.
I confess that my admiration is for the blunt, busy, no-nonsense working boats rather than that faster, painted little hussy the "Royal Iris", but that is only a personal preference. I give place to no one in my determination that the working boats must remain part of the Mersey scene. The River Mersey without the ferries would not be the Mersey to me.
The question is how we are to keep them. On the information that I have been given, there is no way in which they can remain part of the transport services on Merseyside. There are other ways

in which they ought to be and can be made available, but from the information given to me by the Merseyside PIE, which has been made available to every other Merseyside Member, one sees that the estimated loss on the two ferries for 1976–77 is £959,000, of which the loss on the Seacombe ferry is £487,000 and that on the Woodside £481,000. That does not include items of major capital expenditure which are due shortly, including the maintenance, repair and renewal of landing stages. It is estimated that the Woodside stage would cost another £1¼ million. The fare at the moment is 10p and the loss per passenger is 22p.

Mrs. Lynda Chalker: Perhaps I may bring the hon. Gentleman up to date. I have travelled more recently on the ferry than he has. The last time I crossed—the weekend before last—it cost 12p for a single crossing. The question, therefore, is whether the subsidy has kept pace with the increase in the actual fare paid.

Mr. Ogden: I am delighted that the hon. Lady should come to my side of the river more often than I go to her side. The loss is still 20p, and that is no way to run a ferry. The losses have to be borne by the other users, the ratepayers and the taxpayers. In the next two years the transport subsidies which may be made available on Merseyside will be halved so that the authority will have to find another £5 million one way or another.
The transport authority has gone a long way to meet the determined requests of my right hon. Friend the Member for Birkenhead (Mr. Dell) and my hon. Friend the Member for Bebington and Ellesmere Port (Mr. Bates)—who I am glad to see here this evening but who, because of his position as a Whip cannot speak in the debate. That, however, has not prevented him from putting his case strongly to the transport authority.
The Merseyside Members are all united that an alternative service has to be provided for those in the areas which would be affected by any future ferry closures. I am assured that full alternative services will be available if ferries have to close. These services will operate from the Mersey Tunnel and they will be a much improved version


of the services that were operated in 1976 when the Liverpool landing stage sank and alternative services had to be operated.
I am glad that my hon. Friend the Under-Secretary has the task of putting the Government's case on the Bill. He must be aware that all Merseyside Members are united in maintaining that the Mersey Tunnel tolls must be ended and that the tunnel should be financed in the same way as any other part of the motorway network.
With the alternative transport services ready to be made available, the transport authority asks Parliament in Part 1 of the Bill
to authorise the discontinuance of ferry services now operated across the river Mersey between Birkenhead and Liverpool (the Woodside Ferry) and Wallasey and Liverpool (the Seacombe Ferry) should the County Council decide that the operation of either or both the ferries can no longer be justified".
We are not deciding the fate of the ferries tonight. That should be decided on Merseyside.
Let me now turn to the documents. The immediate, united, clear and uncompromising reaction to them of Merseyside Members of Parliament on both sides of the House was to tell the Merseyside PTE that there could be no Bill without a public inquiry on Merseyside. That would give everyone on Merseyside the chance to have his say before any decisions were taken. After presentation, the Bill was blocked by two Labour and two Conservative Members, acting with the knowledge and support of the rest of us. That block is still on.
We have made our first priorities clear. The officers of the PTE and the Merseyside County Council were not too happy at first with what was being done. I think that over the past few months frequent meetings between the Members of Parliament, Councillor Sefton, who is the leader of the county council, Mr. Duffy and his colleagues on the PTE, and their parliamentary agent have produced a better understanding of what we may achieve between us rather than what was put forward last November.
The transport authority has given a clear and specific undertaking that there will be a public inquiry on Merseyside. It will be open to all, and it will be held before any decisions are taken about

possible ferry closures. Having put this firmly in the annexe that has been provided to every Merseyside Member, it has put on record its commitment to public consultation. Accordingly, a public inquiry will be held on Merseyside—

Mr. Eric S. Heffer: How far will the inquiry be independent? Will it be a county council public inquiry?

Mr. Ogden: I am advised that it will have to be held under the authority of the Merseyside County Council. The conditions are set out in the annexe. It might be an excellent idea if my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) were invited to take the chair, but that is not a matter for me.
A public inquiry has to be called by someone, and in this instance it will be called by the PTE, which happens to be the Merseyside County Council. Under the proposals for public consultation, the chairman of the inquiry will be selected by the six Merseyside local authorities, any one of which will presumably have a veto on a candidate it does not like. That means that there would have to be an agreed chairman.
Any person or organisation will be entitled to make verbal or written representations to the inquiry, and before a final decision as to possible ferry closure is taken all the Merseyside district councils—we have an infinite variety on Merseyside—will be asked to make recommendations. All local Members of Parliament will be specifically requested to submit their comments to the county council and the inquiry. If called for, public meetings will be held on both sides of the river. Those clear and categorical assurances by the county council are written into the annexe.
I know that the hon. Member for Wallasey has been very determined in trying to get from the county council an undertaking that a final decision on ferry closure should be carried by a two-thirds majority of the council. So far, talks have been continuing between the county council and the Wirral authority.
The system of local government on Merseyside was created only two or three years ago by the then Conservative Government. At the time the proposals were


going through the House, it was never suggested that decisions by local authorities should have to be carried on a two-thirds majority. The reorganisation legislation included no entrenched clauses.
Some hon. Members might now suggest that lottery Bills should need a two-thirds majority. Others might say that street lighting proposals should be carried only on a two-thirds majority. But there is no provision in any local government legislation for a two-thirds majority on any subject.

Mrs. Chalker: It is important for me to place on the record my concern that we should have a full public inquiry. I hope to catch your eye during the debate, Mr. Deputy Speaker, in order to develop this point. The concern of the Wirral Borough Council is that the areas of three of the borough councils within the Merseyside county do not use the ferries very much and, therefore, are not as concerned about their future as are the hon. Member for Liverpool, West Derby (Mr. Ogden) and his colleagues and my hon. Friend the Member for Wirral (Mr. Hunt) and myself.
The Wirral authority feared that a decision might be made by members of the county council who are not concerned about the ferries. That explains the opposition to proposals going through on a simple majority. We have therefore sought to continue discussions with the Merseyside County Council and with the borough council. We hope that these matters will be resolved in the course of tonight's debate and during the Committee debates on the Bill.

Mr. Ogden: The hon. Lady is a most determined protagonist of her point of view and has certainly represented the views of her constituents. Perhaps my constituents use the ferries less than her constituents do. Possibly the constituents of my hon. Friends the Members for Bebington and Ellesmere Port and for the Scotland Exchange Division of Liverpool use it slightly more. That, however, is no measure of the concern felt by the district or county councils. After all, these are the Mersey ferries, and they strike a note in our hearts. That is why there is still a lively debate on the matter. I must stress to the hon.

Lady, however, that there is no provision in any local authority legislation for two-thirds majorities, and it would be unfortunate if there were.
I am certain that hon. Members will take an interest in the progress of the Bill. I am sure that Mr. Gordon Lindsay, of 25 Howbeck Road, Oxton, Birkenhead, will be interested. He wrote to Members of Parliament on 4th March to ask us to a meeting between him and the Birkenhead History Society at the Liverpool Playhouse, at which an organisation called the Friends of the Ferries was inaugurated. That organisation will want to have its say.
My hon. Friend the Member for Walton passed me a letter from a young man in my constituency, close to his, who wrote:
I am the Liverpool schoolboy who has been collecting signatures for a petition to save the Mersey ferries. As you are my representative in Parliament I hope that you will do all in your power to press for a public inquiry when the Bill is discussed in the next week.
A further meeting of the Friends of the Ferries will be held at Birkenhead Town Hall on 30th March at 7.30 p.m. Young people will be taking an interest in the future of the ferries. I know well that while this is not a party political matter in the normal sense—and not of the kind we had last night—the Wirral and Walton Labour Parties have made their opinions known clearly to their Members of Parliament by letter, by telegram and by personal meetings.
Early in March Miss Hilary Hodge, the prospective Labour parliamentary candidate for Wallasey, wrote a clear and cogent letter to Merseyside Labour Members in which she said:
As you are aware, the Merseyside Transport Executive are promoting a Bill to give them powers to close the Ferries crossing the Mersey from Liverpool to Wallasey and Birkenhead.
There is strong feeling about this, especially in Wallasey. More than 3 million trips are being made on those Ferries each year. The Wallasey Labour Party has set up a small Committee … to examine this whole matter and present a case for retention of the Ferries at the Public Inquiry when the MPTE sets it up—with of course an independent Chairman and the proceedings public.
We are writing to ask that you do all in your power in Parliament to prevent this Bill's passage until after we have had the Public Inquiry and it has made its findings public.


If, after we have presented our evidence and cross-examined the MPTE with regard to the figures adduced to support their case to close the Ferries, and other matters connected with the Ferries, we lose our case—well, that will be that. At least the Labour Party will have shown that it has done all it can to preserve the Ferries.
That contact has been continued. My hon. Friend the Member for Garston and I met Miss Hodge together with the leader of the Merseyside County Council at Blackpool last Saturday, and we went over the details provided by the council. The council seemed to make a good case that at the public inquiry it will be one of the groups which will be putting forward strong arguments about means by which viable financial arrangements can be made for saving at least one of the ferries, if not both. But that is something for the public inquiry.
I cannot say that I yield to anyone in my determination that the ferries should remain part of the Mersey scene. I cannot see, from the information available to me, that they can remain part of the transport scene. That will be a matter for the Merseyside County Council after a full and open public inquiry.
The second part of the Bill is no less contentious than the first. In some cases it is even more so. It proposes ways to meet and to reduce the estimated loss of £2 million a year which arises because 15 per cent. of bus passengers avoid paying the proper fares. This has nothing to do with concessionary fares, school passes or pensioners' passes. It is simply the minority of 15 people in 100 who deliberately pay for a shorter journey than they know they intend to travel. That is a common problem in almost any transport authority, but it is greater in Merseyside because we have a higher percentage of one-man buses—about 94 per cent.
My hon. Friends have received the detailed proposals put forward in its statement by the passenger transport executive. It proposed that if a person was found on a public transport bus who had deliberately paid less than he knew ought to be paid, he would be given a choice of paying a £1 fine at the time or of going to court. Because of objections to that, it is proposed to revise Clause 7 of the Bill. Instead of having fines on the bus, it is proposed to ask the traffic commissioners to allow the penalty

to be the difference between what the person had paid and the maximum standard fare at any given time. For example, if I pay 20p and I deliberately travel a 40p journey, there is at present no penalty and I merely expect to pay the extra 20p if I were caught. I have nothing to lose by bilking my fellow passengers. Instead of that, it is proposed that if someone is found in those circumstances with no reasonable excuse he would pay the standard fare, which would be linked with the maximum authorised fare at any given time. At the moment it is 56p.
I know that some of my hon. Friends are extremely worried about whether the police will become involved if some foolish person tries to implement this idea at 11 o'clock on a Saturday night at Lime Street. What is the attitude of the unions who will have to operate this'? I am advised that there has been the fullest possible consultation between all those responsible in the executive and those who will have the duty to operate the policy.
There are two groups. In one case there is complete agreement, and in the second case there is almost complete agreement. I have received no objections to these proposals from any of the unions involved. As my hon. Friend the Member for Garston knows, in West Derby we have one of the largest passenger transport depots on Merseyside—the Gillmoss bus depot.

Mr. Parry: I raised this matter today with the regional organisers of the Transport and General Workers' Union, which represents the bus staffs. They told me that their union is not happy with this clause.

Mr. Ogden: The union is rightly concerned. It is equally concerned that the authority is losing £2 million a year. If it continues to lose that revenue, it will mean a loss of jobs and the union will be even more concerned. This proposal will not be introduced in a dictatorial manner. There will be ample time for consultations.
My hon. Friend will confirm that we have not had any complaints direct. He has had a clear assurance that:
The traffic Trade Unions comprising platform staff (i.e. drivers and the very few conductors we now employ) have been informed


of our proposals and are generally in favour of them. Negotiations with the Executive's inspectorate staff, who will have the initial duties of enforcement on the bus, were opened in October 1976 and are continuing. We are confident that they will be successful not only because road inspectors know the true extent of the losses being incurred (and their implications for future bus operations) but also because control fares really represent an extension of the excess fares system.
I understand that the police have expressed some concern, but those fears have been to a large degree allayed. The police have raised no objections to the proposals.
My hon. Friends are absolutely right to be concerned about the operations and the difficulties. They know that there are ways in which they can directly consult members of the executive. We know that officially they are not here, but if one looks around one might receive help. If any hon. Members have doubts about the issue, it is possible for consultations to take place with the executive before we get round to the later stages of the Bill.

Mr. Eddie Loyden: We are touching on an important point. This matter was raised by my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) during the discussions we had with the agents acting on behalf of the metropolitan county for the Bill. There was no evidence at that meeting that consultations had taken place with the trade unions. The point made by a number of hon. Members, and my hon. Friend has underlined it, is that the main cause of overriding was the move from two-man operations to one-man operations. It is tragic that the executive should be looking for solutions to a problem for which it has been largely responsible.
Our concern is that the other options open to Merseyside, such as the zoning of fares, have not been examined. The county seems to be looking for the easiest way out of the problem.

Mr. Ogden: That is a difficult problem. We do not say that what is proposed in the Bill is the only way. There would be time in Committee to argue those things in detail.
We cannot suddenly change the buses over to two-man operation. The one-man system was brought in with the agreement of the unions involved. We cannot put the clock back. My hon. Friends have strong objections to this part of the Bill. It is understandable and right that they should be expressed. There is time to sort out those objections if the Bill is allowed to go into Committee. There is ample time during the remainder of this debate from my hon. Friends to take up their worries and fears direct with representatives of the Merseyside Passenger Transport Executive. I cannot say that members of the executive are here, but there is ample time for further consultations. I hope that my hon. Friends will avail themselves of the opportunity.
To sum up, the Bill proposes to deal with the annual loss of up to £1 million on the ferries and £2 million on bus fares. This is not something we can lightly forget. We cannot say that we are not bothered if someone bilks and robs other passengers. The money has to come from the ratepayers, the taxpayers or the bus routes. We should not connive at such robbery. This is £3 million which ought to be provided to maintain the services or else to bring about a reduction in rates.
I ask the House to give the Bill a Second Reading, not a Third Reading. I do not ask for an Act of Parlament. I ask for the chance to put the Bill to a Committee of the House, on which none of us will be able to serve. It has to be comprised of independent Members, who will go through the Bill line by line and clause by clause, no doubt amending it even more than it has been amended. Ultimately, I want the Bill to make it possible for decisions about Merseyside Transport to be taken by the people of Merseyside on Merseyside for the people of Merseyside. I do not want Parliament to have a veto over what the people of Merseyside decide. I do not want the Transport Department to be deciding matters.
If we give the Bill an unopposed Second Reading, despite the doubts and fears which have been expressed, we can find the time for consultation and consideration. Real objections can be made decisive on Third Reading. Until that


happens, I ask hon. Members to permit the Bill to go into a Committee.

7.32 p.m.

Mr. Graham Page: The hon. Member for Liverpool, West Derby (Mr. Ogden) has put the case for this Bill in a persuasive and informative way. Perhaps he was more persuasive as regards the discontinuance of the ferries than he was when dealing with the controlled fares, or what I prefer to call "fines on the spot". When he was talking about the ferries he was asking the House to use its head rather than its heart, but at the same time he found a little difficulty in hiding his own emotions.
We are all very emotional and over-sentimental about Merseyside transport. We shed a tear in the old days over the demise of the trams, although heaven knows what chaos the traffic would have been in if we had retained them. We wept when the overhead railway was demolished. I still retain a ticket for the last trip from Seaforth to Dingle. I treasure that ticket. We fought for and succeeded in retaining in my area the Exchange to Southport line against the then Dr. Beeching and Mr. Marples.
Now we are faced with the discontinuance of the ferries which have been made famous outside Merseyside by a pop group. We treasure the ferries more than that on Merseyside. I am sure that you, Mr. Deputy Speaker, know the song we have about our Liverpool home in which we admit that we speak with an "accent exceedingly rurr" and we regret the fact that we have a statue "exceedingly burr". The last line of the song is:
If you want a cathedral, we've got one to spurr.
That has now been changed to:
If you want a few ferries, we've got some to spurr.
That is very regrettable.
The hon. Member for Liverpool, West Derby has put forward the financial case, that there is a loss on the ferries and that, therefore, we must have a Bill of this sort which seeks to prevent that loss by discontinuing the feries. The Bill does not do that immediately, but gives the county council the power to hold an inquiry and decide whether the ferries shall cease to run. Clauses 4, 5 and 6 deal with the discontinuance of the ferries.
I refer to the statement of the county council on its intentions with regard to these ferries. I notice that paragraph 4 of that statement says:
It is intended that, if a decision is taken to close the Seacombe Ferry, existing cross-river bus services through the Kingsway Tunnel would be augmented and bus services in Wallasey restructured to provide feeder services to stations on the Liverpool to New Brighton Line of the Mersey Railway.
I warn those who use the Liverpool to New Brighton line that if they have to rely on the kind of feeder services which have already been put into operation in my constituency they will suffer greatly. The buses from my constituency to Liverpool have almost ceased to run. They dump their passengers at a windy roundabout in Waterloo, where old ladies and schoolchildren and the rest of us have to cross a busy road and go down some very steep steps. The Merseyside Passenger Transport Executive ought to consider the public more than that. If it is suggesting that it will introduce that type of feeder service to replace the ferries I shall be disappointed.
That is why I am glad that it has put forward the proposition that there should be a public inquiry before any decision is reached. I am grateful for the undertaking that, although the Bill does not include any provision for a public inquiry at present, it is the intention of the promoters to move amendments in Committee to give effect to assurances which have been given about the public inquiry. I hope that whatever assurances are accepted by the Committee they will be spelled out in the Bill rather than there being any kind of side undertaking.
As I understand it, the assurances are in the annexe to the statement. They say:
1. A Public Inquiry will be held on Merseyside. 2. The Chairman of the Inquiry will be selected by the six Merseyside local authorities.
The hon. Member for Liverpool, Walton (Mr. Heffer) intervened earlier to ask that it should be an independent inquiry. The hon. Member for West Derby suggested that the hon. Member for Walton should be the chairman of the inquiry. I made some such aside as "heaven forbid". I was not really joking, because it should be an independent inquiry. The chairman should not be appointed by the Merseyside County Council or by the


Merseyside districts. He should be appointed by the Secretary of State for Transport, from the panels of inspectors, or else by the Lord Chancellor.
The assurances continue:
4. Before a final decision as to possible closure of the ferries is taken, all the Merseyside District Councils will be asked to make recommendations to the County Council.
It will be seen—I am sorry but I have a bad cough. According to paragraph 4 the district councils will make recommendations to the county council and not to the inquiry, while the representations of Members of Parliament will be made to the county council and to the inquiry. Why cannot the district councils make recommendations to the inquiry?
I now turn to Clause 6. According to subsection (1)(b) the owners will be put under a liability to carry out certain directions, but I am not sure whether those are directions from Trinity House or the Secretary of State and if the owners disobeyed those directions—

Mr. Ogden: On a point of order, Mr. Deputy Speaker. I have no wish to interrupt, and it would be foolish to try to stop the right hon. Member for Crosby (Mr. Page) but he has a nasty cough. I do not know whether he is for or against the Bill, but would it be possible to have a commercial break so that the right hon. Gentleman could take a rest for a little while? This is an occasion that does not often arise. This is not just another Bill or committee that we are discussing. If the right hon. Gentleman were willing to stop—by leave of the Chair—and then come back to continue his remarks later, I think that would have the support of the House.

The Under-Secretary of State for Transport (Mr. John Horam): Perhaps I could intervene to state the Government's position. I have no desire to delay the House, but that would give the right hon. Member for Crosby (Mr. Page) an opportunity to finish his speech in a proper manner. As this is merely an intervention I shall be brief in stating the Government's attitude to the proposals in the Bill that has been introducd by my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden).
My hon. Friend has stated the proposals clearly, and we have no objection to them in principle. The ferries issue is a matter for the passenger transport executive. It has to decide where its priorities for economies should lie. Nevertheless, I welcome the proposal to provide for a local inquiry into the ferry closures. That will allow an opportunity for all aspects of what is essentially a local matter to be fully considered before a decision is made. It has been suggested that the Secretary of State for Transport should have some say in this matter. I wholly disagree, and I want no say. My hon. Friend the Member for West Derby is right to stress that this is a local issue and that it should be decided as such.
As for the overriding on buses, we have considerable sympathy for the promoters' wish to prevent non-payment of fares. The problem is widespread and has been referred to before during such debates. However, the way in which the promoters propose to achieve their objective raises some difficult questions of principle, which are of particular interest to the Home Secretary. These matters are under discussion with the promoters, and although the proposals, as they stand, involve a substantial departure from the principles that have always governed the provision of financial penalties, I hope that these questions will be resolved before the Bill reaches Committee.
I suggest that the House should follow the convention on Private Bills and give the Bill a Second Reading so that it can go to Committee and the proposals can be examined with the benefit of expert evidence.
Perhaps we may now return to the speech of the right hon. Member for Crosby, who is certainly an expert in these matters.

Mr. Leslie Spriggs: Before the right hon. Member for Crosby (Mr. Page) continues his speech may I intervene to point out to him that St. Helens, which is one of the new districts of the metropolitan county council area, is interested in the ferry service? Many of my constituents would not like to see the service go—at least not without full and proper inquiry being made and without some kind of justice being shown to both taxpayers and ratepayers. We feel that the Bill should have a Second Reading,


and my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) who moved the Second Reading, certainly made a case for that. I should like the right hon. Member for Crosby to bear in mind that the surrounding districts have an interest in this matter because of the many problems that would be involved in the withdrawal of such a service. We should like the Bill to be given a Second Reading and to be sent to a Committee of independent hon. Members who could examine all the proposals that have been made during the Second Reading debate tonight.

Mr. Graham Page: With the leave of the House I should like to express my apologies, and my gratitude to those who have interrupted in order that I may continue.
I am not speaking against the Bill in order to defeat the Second Reading. The Bill does not contain the provisions that are needed to satisfy the public. It is all very well for us to discuss the Bill on the basis of the raw phrases that it contains and a statement from the promoters, but there is a lot more that the public want to know—not only about why the Bill is necessary, but the details of the provisions that will be made for those who now use the ferries frequently.
Earlier in my speech I began with this rather extraordinary Clause 6 which makes it an offence for the owners not to obey directions. I think that the Bill means only directions from Trinity House, but there is some doubt as to whether it might mean directions from the Secretary of State as well. It is unusual to make a public body responsible for an offence if it does not obey a direction. Normally, if a public body does not carry out the terms of an Act of Parliament one relies upon prerogative writs of mandamus to make it do so. It seems strange to impose such a penalty on the executive—and the end of Clause 6 makes clear that the executive is the owner.
I now turn to Clause 7, which refers to the overriding on bus service vehicles. The hon. Member for West Derby put forward a convincing and persuasive case for the first part of the Bill, but he was not so persuasive or convincing on the second part. I have read the promoters' statement, but I am not clear about their

intentions, Subsection (3)(a) is not acceptable. It says:
Where an authorised officer has reason to believe that on any occasion a person is committing or has committed an offence under this section, he may demand from that person payment of a fixed charge of fl under this subsection.
The promoters tell us in their statement that they realise that this sort of provision is not acceptable and that they propose to replace it with a provision for charging standard fares for overriding, with those fares being subject to the determination of the traffic commissioners.
I understand that they intend to retain the collection of money on the spot by an authorised officer. This is an entirely new principle in our law. Only the Customs and Excise has such a right at present. It has never been included in our traffic laws. I am sure that traffic wardens would be only too happy to collect money on the spot, but we have never given them that right. I know that there are strong arguments of convenience, and savings in administrative expense, in favour of the collection of fines on the spot, and I know that they may have worked well in other countries, but there is a great danger to the public in allowing such a provision to creep into a Private Bill. It is a matter of principle in our law that we do not allow even the police, let alone other authorised officers to collect fines on the spot. Because such a proposal gets into a Private Bill it will be regarded as a precedent for Bill after Bill, and eventually will be introduced into our general law, on the ground that it has been included in a number of Private Acts.

Mr. Ogden: An almost identical system is in operation in Cardiff. That is not necessarily an argument for suggesting that it should be introduced on Merseyside, but it is operated not only in Europe, but in the United Kingdom. It is one way of dealing with the problem. We could discuss others in Committee. That would certainly be better than doing nothing about it and condoning these people who deliberately withhold their fares. They are robbing their fellow passengers. The objections voiced by the right hon. Member for Crosby (Mr. Page) could be explored in Committee.

Mr. Page: I appreciate that those who escape payment are merely putting a greater burden on the ordinary passengers. This is a difficult problem. I have no doubt that it involves considerable losses, but the proposed system should be debated in the House on a Public Bill and not on a Private Bill. We should not introduce this new concept of law into a Private Bill. Once it gets there it can be a precedent for other Private Bills and eventually it will creep into our general law, and without proper debate.
If money is demanded from a passenger who appears to be overriding, he will be extremely embarrassed. There are defences provided under the Bill, including reasonable excuse, and a fare not being tendered for that person by someone else—say, a relative at the other end of the bus; but the normal person, if accused of overriding, will not argue with an authorised officer, but will pay up even though a considerable injustice may be done.
I have no objection to the system of paying parking fines by post if a person does not wish to go to court, but I have strong objections to the idea of payment on the spot. I understand that the police also have objections, and it was rather remiss of the council not to have consulted the police at an early stage. Indeed, I understand that the police have still not been formally consulted and that they have serious objections to the collection of fines by authorised officers. Even if the police had to collect the money themselves they would object to having a new concept in law introduced in a private Bill without proper debate. I hope that the Committee will remove that part of the Bill, leaving a provision to pay fines by post, but taking out the provision for on the spot fines.

Mr. Spriggs: Before the right hon. Gentleman leaves this important point, is he aware that there is a precedent, if not for this sort of charge, at least for taking the names and addresses of people who commit an offence, particularly if they have done so on several occasions? If an officer or employee of British Rail has reason to believe that a person regularly evades payment of the proper fare, that person's name and address is taken and the authority takes whatever steps it believes necessary against that person.

Mr. Page: I have always understood that if one is unfortunate enough not to have the money to pay one's fare, it is possible to give one's name and address and to pay afterwards. I do not object to that system, but I think that demanding money on the spot will cause great ill feeling between the travelling public and Merseyside Passenger Transport Executive.
There are difficulties in the Bill, and I realise that something will be done about the collection of fares. I shall give the Bill fair wind till it comes back from Committee. If the things to which I object are still there, I shall not vote for it.

7.58 p.m.

Mr. Eric S. Heffer: I shall make a brief speech because the right hon. Member for Crosby (Mr. Page) has said many of the things that I would have said.
I agree with my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) that we all have a great affection for the ferries and do not wish to see them disappear. I hope that we shall find some way of allowing them to continue, perhaps as an amenity for the people of the area. For example, many pensioners use the ferries for trips across the river. It is sad that the ferries no longer go to New Brighton, because that used to be a marvellous trip. Sometimes the old folk did not even bother to go ashore. When I was convalescing after a nasty illness I took that trip every day for three weeks. It was refreshing and delightful. In those days the river was filled with ships and was a wonderful sight.
Under an existing Act, the Wallasey ferry can be removed anyway, whatever is done to this Bill. The Bill must get through in order to remove the Birkenhead ferry.
I should like to see an independent inquiry. It must be a local and not a national inquiry. It should be conducted independently, not by someone from the county council or the local authority. An independent judgment should be reached by someone who is in no way responsible to the county council. I know that even if such a person were appointed people would argue that he was not independent, but I hope that my suggestion will be


taken on board when the matter comes up. There is deep feeling in the area. My hon. Friend the Member for West Derby said that the Labour Parties of Wallasey and Wirral want an independent public inquiry. The members of those parties say that we should vote against the Bill until that promise is made. I shall not go that far, but I want my hon. Friend, who is in touch with the sponsors, to ensure that that is done so that when the Bill comes back to us we may support it.
Nobody wants overriding. I do not want my rates to sustain people who do not pay their bus fares. I used to object to such people when I travelled regularly on the Liverpool buses. However, it is not as simple as that. My hon. Friend said that at the moment the maximum fare is only 56p.
I was interested to note that the statement issued by the promoters of the Bill says that the practice of overriding on buses is a serious problem for bus operators and that it has become regrettably prevalent on Merseyside, particularly since the introduction of one-man operated buses. There is a high level of unemployment on Merseyside. If the unemployed believe that they can go further than they should without paying their fare they probably feel that they have some justification. I am not saying that all the unemployed do that.
When one-man bus operations were discussed in the House I spoke strongly against my right hon. Friend the Member for Blackburn (Mrs. Castle). I was in a delegation to the House. My hon. Friend suggested that the unions accepted one-man buses. It was not quite that way. They accepted them only after 16 weeks' strike and after the members of the union had marched up and down the streets of Liverpool. I received very few letters about the matter, but I had a few telephone calls. Eventually an agreement was reached, but it was not a happy one. I have never believed in one-man buses, because they are a step back. They should be reconsidered. They cost £2 million or more. Whatever the figure is, it is a large sum of money, which could be used to employ conductors. That would mean that more people would be employed. That possibility must be examined.
My hon. Friend the Member for Liverpool, Toxteth (Mr. Crawshaw) said that we should follow the example of the Paris Metro, where there is a standard fare. There is also a standard fare on the New York buses, which applies whether one travels half a mile or 15 miles. That could be the answer. Machines are installed and passengers are seen to put money into them. I should prefer to employ more work people by operating two-man buses. That would be more civilised, and it might also speed up the routes. The one-man operated bus trips that took 20 minutes when I lived there now take half an hour.

Mr. Richard Crawshaw: One could eat one's lunch while one was travelling.

Mr. Heffer: My hon. Friend is correct. Services have not improved. I do not blame the passenger transport authority, because it has done as much as it can. There is a vicious circle, because higher fares lead more people to look for other means of transport.
I ask the Government to consider my suggestions, because if they do not and if the clause remains as it is I shall not support the Bill. I feel like voting against it tonight, but if I am given an assurance that that matter will be examined I shall support the Bill on that basis.
I now turn to the Merseyside ferries. Hon. Members may remember the Liverpool Echo record called "Sounds of the Mersey". I remember one of the lads singing "Bring back a parrot"and another replying" I shall try, but I am only going to Birkenhead". That sums up the attitude of the people towards ferries. They are an institution in Liverpool. We love them. We have discarded too many institutions. The guts have been torn out of our city. It has been ruined. It is not the city that I went to as a young fellow. Its guts have been torn out.
We cannot let everything go. We cannot let things such as the dockers' umbrella go. Many things have gone. We must not allow the ferries to go like that. I hope that something will be done to ensure that some ferries at least will be left to provide an amenity for the people.

8.9 p.m.

Mr. David Hunt: I shudder to say that the hon. Member for Liverpool, Walton (Mr. Heffer) brought tears to my eyes. I confess that I, like him, have Liverpool in my blood, and that has conditioned my attitude towards the ferries. I come from a family that has been involved for generations in shipping in Liverpool. As a young kid at school I constantly used the ferries and I know many others who did the same.
I shall explain to the House why so many of my constituents, those living on the Wirral Peninsula and on the Liverpool side, are angry about the way in which the Bill has been brought forward. It was an astute move of the sponsors to appoint such an amiable, friendly and wise person as my hon. Friend the Member for Liverpool, West Derby (Mr. Ogden) to move the Second Reading of the Bill. The words that I wish to use are difficult to use when faced with such an impressive countenance, but that will not stop me, because my constituents are very angry.
I have a document that was passed to me by Peter Saunders, the local correspondent of the Liverpool Daily Post. I refer to the publication by the Merseyside County Council, called
MPTE—Keeping Merseyside on the move.
It has a beautiful picture of the ferries on the front. That document was published in May 1975. It is an authoritative document. It states quite clearly:
No, despite rumours to the contrary there will always be a ferry 'cross the Mersey.
It goes into great detail about how the ferries are part of our transportation heritage on the Mersey. Yet we have had a shabby Bill brought before the House called the Merseyside Passenger Transport Bill, with inadequate consultations and virtually no discussions before it was brought forward.
Had this Bill slipped through, as it might well have done but for the vigilance of my hon. Friend the Member for Wallasey (Mrs. Chalker) and other hon. Members, it would have entitled Merseyside County Council to close down the ferries without any public inquiry on giving one month's notice. The hon. Member for Walton said that the council could have closed down the Wallasey ferry without coming to Parliament, but

there would have had to be a public inquiry. If the Bill had slipped through before my hon. Friend had spotted this, the council would have been able to close the Wallasey ferry without any public inquiry. The council said to her, to myself and to other hon. Members that it was much easier to put the Wallasey ferry in with the Woodside ferry, but it did not convince us and it has not persuaded us since that it was not seeking to close this wonderful Merseyside institution without any public inquiry or proper consultation in which my constituents and those of other hon. Members could have participated.
Therefore, today we have this debate, thanks to the blockage of the Bill by my hon. Friend the Member for Wallasey and other hon. Members. I do not want to labour the point, but my hon. Friend is fast becoming known as the Britannia of the Mersey—

Mr. Ogden: The hon. Gentleman knows what happened to Britannia.

Mr. Hunt: —over whom no waves will sweep the ferry aside. I give her every credit for having made quite certain now that the people of Wallasey will have a say. However, I am afraid that my hon. Friend the Member for West Derby may well become known to the 3½ million passengers who use the ferries every year as the man who sank the ferries.
It is not just a historical accident that the Merseyside County Council and the MPTE have to ask the House for permission even to think about closing the ferry. It is really a measure of where history has put the ferry. My hon. Friend has mentioned the 14th century, but it is quite clear that the ferry service across the Mersey goes back to 1130, and probably further, when the right to charge a fee for crossing the Mersey was granted by royalty.
However, in reference to history and the analogy, perhaps I may explain why my constituents in Merseyside and Wirral and constituents of other hon. Members are so angry about the whole procedure that has taken place. The reason is that the Merseyside County Council is now clearly seen as the body that is trying to close the ferry without any real public participation. My right hon. Friend the Member for Crosby (Mr. Page) mentioned an independent inquiry, as other


speakers have. My constituents will never see an independent inquiry as one in which the Merseyside County Council takes the decision.
Let us now see what will happen if the Bill goes through. There will be a local inquiry, whether or not it is chaired by the hon. Member for Walton. I would regard him as being independent, because he almost brought tears to my eyes during his speech. He would be independent, he would let all the arguments generate, and make a fair report.
Whoever is the independent chairman, we have a local inquiry. The Merseyside County Council then gets the report from the local inquiry. There is nothing in the Bill that would in any way inhibit Merseyside County Council from receiving a report that says quite clearly that the ferries must not be closed and lays down a whole series of statistics and arguments why they should not be closed, and then saying "It is a very interesting document, and we have read it, but we shall close the ferries." That is why the Metropolitan Borough of Wirral and many other people say "We are not happy about Merseyside County Council taking this decision by a simple majority."
My hon. Friend and I have suggested that a compromise solution would be to say that if the chairman said "No, you must not close the ferry. We have had a five-week inquiry and all the evidence shows that it must not be closed", there should be a two-thirds majority of Merseyside County Council in order to upset the inspector's decision. That was a very fair suggestion. But no; it seems that Merseyside County Council still wishes to take the decision by a simple majority.
I warn the sponsors of the Bill that although we may not oppose the Second Reading tonight, if there is no way in which fears such as these can be met—either by a two-thirds majority, under whatever circumstances, or by Wirral council, which provides from within its boundaries the vast majority of the people who use the ferry consistently and daily—the Wirral council should have an opportunity of making a decision of equal validity to that taken by Merseyside County Council, either before or afterwards, to ratify the county council's decision.
I suggest all these things because there are real fears that if we in the House of Commons release the control that we have over this situation, the ferries will sink and pass into history. This is not just a matter of a dockers' umbrella; it has been an umbrella for many Liverpool citizens, and it has gone and people now regret it. Perhaps the saddest thing about the ferries is that if they go—as Merseyside County Council originally wanted, at just one month's notice, published in a document to be fixed at the pierhead—they will not return. There is no chance of a return.
I should now like to mention some of the arguments that have been put forward very impressively by a whole host of my constituents. I do not know about other Members' postbags on this issue, but I have had many hundreds of people contacting me, by letter and in person and with petitions, saying that they do not want the ferries closed. It may be useful to the House if I read just one or two extracts to indicate exactly what is in the minds of those who do not wish us in the House of Commons to release its present control of the ferries.
As hon. Members may know, my constituency is rather large, and encompasses part of Cheshire as well as Merseyside. One gentleman wrote to me from Willasston. Living there, he is many miles away from the ferry, but he says,
Every day I use either the Birkenhead or the Wallasey ferry in order to commute to and from Liverpool. I travel by bicycle and use the ferries in company with a small but growing number of cyclists for whom the withdrawal of these services would cause much inconvenience. There are many hundreds of other users too at rush-hour times who apparently prefer, for reasons of convenience, or price, or both, to use the boats
—rather than to go underground. He continues,
More importantly for myself and for many others, the stopping of these ferries would cause hardship and inconvenience.
Another constituent also cycles—the cyclists are very important in this matter—and points out that there are no real alternative facilities for cyclists to get across from my constituency and those of the right hon. Member for Birkenhead (Mr. Dell)—the Secretary of State for Trade—the hon. Member for Bebington and Ellesmere Port (Mr. Bates) and my hon. Friend the Member for Wallasey.


He says that those who wish to cycle cannot really do so at present unless they go by ferry.
There are no real facilities through the road tunnel. One of the tunnels is banned to cyclists and the other allows them through only for limited periods. One of my constituents who lives in the Irby area tells me that when he tries to cycle through the tunnel it is rather like dicing with death. It is a narrow lane. Certain suggestions have been made, but they are not real alternatives.
If the ferries are closed, it is proposed that cyclists should try to use the escalators to go down into the depths of the underground and use an auxiliary truck that will be put on the back of the underground train. On reaching the other side they would have to haul themselves up the steps of the escalator. I understand that that would be possible only at great additional expense, at a price far above what cyclists now pay to travel on the ferries. I hope that the sponsors will take very much into account the feeling of cyclists.

Mr. Ogden: I was expecting an intervention from the hon. Member for Liverpool, Wavertree (Mr. Steen)—Liverpool's own sleeping beauty. I know of the hon. Gentleman's interest in cycling. I am advised that there have been the very greatest consultations between the MPTE and the cycling organisations. There is a proposal for extending the time during which cycling is permitted through the Mersey Tunnel. I confess that I have never seen a cyclist going through the tunnel. It has never happened in my experience. However, there has been some agreement about alternatives and I understand that national and local cycling organisations are reasonably confident. They have made exactly the same points as those made by the hon. Gentleman on behalf of his constituents. I hope that they will continue to do so until they get real guarantees of an improved and alternative service.

Mr. Hunt: I hope that those endearing comments mean that by the time the Bill returns we shall have had some clear assurances of what will happen to the poor cyclists.
A number of associations have contacted me, including the Wirral Federation

of Townswomen's Guilds. Mrs. Olerenshaw wrote:
on behalf of all the guilds of the Wirral Federation … we wholeheartedly support all your efforts in the fight against the closure of the Mersey ferries.
Another constituent in Birkenhead—my constituency goes right into Birkenhead, and many of my Birkenhead constituents use the ferries daily—writes that the ferry
is something that must not be valued in money but by its intrinsic value as an amenity today and also as a right of way.
Another constituent, who lives in Preston, writes:
I am writing to you with an impassioned plea against the proposed closure of the Merseyside ferries, which first came into existence in 1122 when the monks from Birkenhead Priory made crossings across the River Mersey. This is 854 momentous years of Birkenhead, Merseyside and British history and tradition".
The next letter that I quote is from a very well-known gentleman from Birkenhead, namely, Mr. Allison, who is President of the Birkenhead History Society. Mr. Allison was Chairman of the Society for 31 years. He is Chairman of the Geographical Association. He writes:
The ferry is much more than a means of transport: it performs an important social purpose (or purposes) and its closure would be a blow to the folk from Merseyside's poorer streets.
There are many other examples that I could read to the House but I leave it at that, except to say that my hon. Friend the Member for West Derby mentioned the Ferry Forum or the Friends of the Ferries. I welcome very much the initiative of those who have set up the organisation, who include some of those I have spoken of already, including Gordon Lindsay. I hope that the Friends of the Ferries will receive the support that they deserve.
The amount of mail that I have received demonstrates that there is real concern that there will be a closure of the ferries if the House suddenly releases its hold over them. That is a real concern, which has not been met completely by the words of my hon. Friend the Member for West Derby. Before we can support the Bill when it returns from Committee we shall need more positive assurances about the type of inquiry that is to be held and about the way in which it will be conducted.
Many people may ask whether there has been a proper survey of the cross-river facilities in Merseyside. I have not


heard my hon. Friend the Member for West Derby mention an enormous report, which was made at great expense and which has been shelved by the Merseyside Passenger Transport Executive. The Cranfield Institute of Technology produced a study in 1974, after a lengthy process of consultation and deliberation. The study is entitled "A Study Of The Future Need For Service And Transport Facilities Across The River Mersey". This great work examined the ferry service. It examined the cost and the number of people using the service and put forward a series of major conclusions most of which have not been considered properly and in detal.
The first major conclusion was that although the closure of the ferry would minimise the financial burden there was significant scope for cutting the operating losses of the ferry services without major degradation in the level of service offered. We have not really seen any serious attempt made by the MPTE—I have heard all the arguments—to minimise the losses of the ferry. My constituents and others in Merseyside have the impression that it has already decided to close the ferry. Already the paint is peeling. The people are starting to lose heart. The ferry services are beginning, slowly but surely, to increase the arguments for closing them altogether. Where have the real investigations taken place into the scope for cutting the ferry services? What did the great Cranfield Institute mean?
First, it said that new and smaller ferries could operate satisfactorily from existing landing stages. It said that three new 500-place vessels would offer the cheapest solution to continued operation of both the Woodside and Wallasey routes, in spite of outstanding depreciation and interest payments on current vessels. It then stated that
The introduction of more automatic ticketing would offer substantial economies for the ferry operation.
It concluded:
To many users, the ferries are an attractive means of travel, and factors such as the river view, fresh air and the ride itself play a significant part in many choices to use the ferry mode.
This massive report—I am not doing it justice, because other hon. Members wish to speak—summarised the position as follows:

There are several other factors which should play a part in the taking of a decision on the future of the Mersey ferries which this study has not been able to consider, e.g., employment effects, educational cruises. This must be borne in mind by those who may use this study to aid in the taking of decisions.
That is a pious hope. Who has seriously used this study to aid the taking of decisions?
My constituents do not believe that real research has been done on ways in which the ferries could be kept as part of the transportation system. It was shrugged aside by my hon. Friend the Member for West Derby. He said that there was a future for the ferries but not as part of our transportation system. I say to him "Yes, as part of the transportation system."

Mr. Ogden: If we have to have Conservative Members on Merseyside, let me say that I admire the hon. Gentleman, but will he stop calling me his hon. Friend, especially after what the Tories tried to do to us last night? He should not let the others know that occasionally we speak to each other.

Mr. Hunt: I shall not stop calling my hon. Friend a friend. I am one of those who believe that on Merseyside we should have an all-party approach to Merseyside problems.

Mr. Ogden: We are working towards it.

Mr. Hunt: Unfortunately, there is still some slippage on the Government but not on the Opposition side. The sooner we get an all-party approach the sooner we shall start tackling the fundamental problems. I am sorry that I have upset my hon. Friend by calling him a friend, but I shall certainly not call him an enemy.
The concessions by the sponsors of the Bill are insufficient for my constituents. First, it is said that there will be a local inquiry. But that will be an inquiry similar to inquiries held into the closing of a minor road. It is not good enough for such a decision to be taken following such an inquiry. It must be a much wider and longer inquiry, with more authority.

Mr. Parry: I understand that there is a panel of chairmen connected with the Department of the Environment. Would the hon. Gentleman agree to one of those


independent chairmen chairing the public inquiry?

Mr. Hunt: Yes, I would. That would be a very satisfactory way to deal with the matter. I am not committing anyone else. It may be that someone else who is just as independent but not on a panel of chairmen would be suitable, but once we had such a chairman we should have to have a good independent inquiry. I should like to be assured by the hon. Member for West Derby, when he returns to the Chamber, that the inquiry will not be concerned with economic questions in isolation. I should like to be assured that it will be able to consider social, economic, historical, cultural and other factors as well. If the only consideration in these matters were money, we should close down libraries and all sorts of recreational centres. All these other issues should be taken into account.
I should also like an assurance that anyone who feels strongly about the closure of the ferries will have an equal opportunity to put his views. There should be no limit because of the rules of evidence on written representations, petitions or oral evidence. The chairman should have full discretion and should be encouraged to make the inquiry as wide as possible.
The question of the Wallasey ferry is separate from the question of the Woodside ferry. They should not be dealt with in the same inquiry. As my hon. Friend the Member for Wallasey will no doubt stress, there are many factors to be considered. One is that there is no alternative facility for those who live near the Wallasey ferry.
I am quite willing to admit that if my constituents walk up the road they can get on a rail link that will speed them across the river. But the situation is very different in Wallasey. Therefore, we should have two separate local inquiries, one for Woodside and one for Wallasey, just as we had a separate one for New Brighton. The two ferries simply cannot be lumped together.
My constituents want an assurance that before the final decision to close the ferries is taken there will be a chance for the loop line and alternative facilities to be examined to see whether they can

work and take the alternative flow. Before the Merseyside County Council reach a decision there must be an equal opportunity for the Wirral Council, Members of Parliament and anyone else to put forward their arguments. Some people may ask why there should be the enormous rigmarole of consultation. The answer is simple. If it had not been for the fact that an attempt is being made to force this shabby Bill through the House my constituents would have had far more trust and faith in the Merseyside County Council. But because of the history of this episode they want this sort of undertaking before a final decision is made.
What are the alternatives to the Woodside ferry? We have not yet considered properly the question of triangular services. This has some possibilities. There is also the question of the use of hovercraft. The Cranfield survey pointed out that there was a possibility of using hovercraft on the river in place of ferry boats. If one looks at the figures one sees that the reason for the very high cost of the ferry boats—£900,000—is that they must be manned for 24 hours. Because of the tidal estuary waters on the River Mersey there must be a full crew on each ferry boat for 24 hours a day. The boat does not leave the river, but stays around on it, and therefore must be manned full-time. There are other reasons why a smaller boat or surface craft would be a better and cheaper way of keeping the Mesey ferries going.
Clause 7 refers to the offences of overriding. The police have a right always to be consulted about a Bill that seeks to create a situation in which their services may be called upon far more frequently than at pesent. I can think of many instances in which an angry Liverpool man might be absolutely outraged at being asked to pay an on-the-spot fine for overriding. It is no use the Merseyside Passenger Transport Executive saying to the police that this does not mean extra work for them, because the police know that at any time they may have to face a situation in which they have to soothe people.
This is another reason why the whole thing is so inadequate. The police were not consulted before Clause 7 was put in the Bill. I have been privy to a letter written by the Chief Constable to


the Merseyside Passenger Transport Executive which says:
It is unfortunate when considering the enforcement connotations that the police were not consulted at the drafting stage of the Bill. In fact, it might even be considered discourteous in view of the implications.
How can my constituents have any faith in a party that seeks to put through this Bill in such a way? It all adds up to a general feeling of serious disquiet on Merseyside.
My hon. Friend the Member for West Derby said that this decision should be taken on Merseyside by Merseyside people. I could not agree more, but I feel that I am a Merseyside person and that I have been elected to this place to represent the part of Merseyside that comprises my constituency.
I look round me in the House and see a number of Merseyside people. We have have every right, because of historical considerations, to impose a veto on the closure of these ferries. It is wrong to say that we should give up all control and influence and to pass it on to the Merseyside County Council. The Merseyside County Council has no more right to say that it alone represents Merseyside people than do we as Members of Parliament. If the council has a right to make a decision, so do we, as the House of Commons. I do not accept the argument that we should not seek to impose any control on the Merseyside County Council in reaching its decision.
The chairman of the county council has said that so far as he is concerned there is no other decision that requires a two-thirds majority in the council, and he wonders why there should have to be such a majority on this issue. I challenge him and say that there is every right for the House of Commons to say that there should be a two-thirds majority in return for the fact that we are to give up our veto on the closure of the ferry service. That is a logical argument. I hope that when the sponsors consider this Bill after this debate they will decide to accept the reasonable approach of the Wirral Metropolitan Borough Council and authorise, just on this issue, a two-thirds majority in the county council if the ferries are to be closed.
My constituents, and no doubt many others on Merseyside, have a clear impression that Merseyside County Council has

decided to close both ferries. Indeed, that decision was advertised.

Mr. Heffer: I am sorry to intervene in the hon. Gentleman's speech, because he has been speaking at some length and there are other Members who would like to take part. This is an important matter. I have expressed my feelings strongly, but there is a nagging doubt about the deficit of nearly £1 million. That deficit must be dealt with. Since the hon. Gentleman belongs to a party that does not believe in public expenditure and wants to cut it, will he tell us how we are to get rid of that deficit? That is an important consideration in this discussion.

Mr. Hunt: In reply to the first point put by the hon. Gentleman I would point out that there is a great deal of time left for this debate. I should not be speaking at such length if I felt that I were taking away the right of other hon. Members to express their views.
On the second point, I must tell the hon. Gentleman that the large deficit is worrying, but I have explained that there are ways in which it could be got rid of. That is not my opinion; it is the opinion of an institute that has studied the matter in detail and over a great length of time.
We must also examine the deficit in the context of Merseyside passenger transport generally. The subsidy being paid for a ferry passenger is not that much more than the subsidy for a rail passenger. What I argue, and have argued on several occasions, is that someone should now follow up the institute survey and report by doing a survey into all Merseyside passenger transport in order to see whether savings can be made in other areas. Why pick on the ferries? It seems to my constituents that everyone is picking on the ferries as scapegoats for the enormous losses—this is just a small proportion—of the MPTE. My constituents ask "Why pick on the ferries?"
Before we take an irreversible decision to close what everyone accepts in Merseyside as an institution, should there not be more thought and research into ways in which savings could be accomplished over the whole wide range of Merseyside passenger transport? Many of my constituents have already pointed out to me


where £1 million could be saved here or £500,000 there, whether or not it is in some part of the MPTE. They unanimously say "Do not close our ferry until someone has taken a closer look into the workings of the MPTE".
My major concern in the debate has been to point out that although we may allow a Second Reading we are not satisfied with the concessions so far made. It is a bad and inadequately discussed Bill, and insufficient consultation has taken place. I hope that after this debate those who have anything to do with the Bill will take it away and bring back a very changed Bill on Report. It should be a Bill that gives the people of Merseyside a right to have a say in the destiny of the ferries. For historical, cultural, economic and social reasons the "Ferry 'Cross the Mersey" is a way of Merseyside life. If that disappears, part of our heritage will have gone.
The people of Merseyside have had so much stuffing taken out of them with the high rate of unemployment and the very serious inner city deprivation that if we taken the ferries away a lot of them will take the ferries away a lot of them will to the sponsors "Take this Bill away and bring us another one that will give real democracy in Merseyside".

8.45 p.m.

Mr. Robert Parry: My hon. Friend the Member for Liverpool, West Derby (Mr. Ogden), who sponsored the Bill, has covered the historical background and the reasons for the MPTE promoting the Bill. I disagree with some of the points that my hon. Friend made in his opening remarks. My hon. Friend the Member for Liverpool, Walton (Mr. Heffer) has covered many of the points that I would have raised, and my speech will therefore be rather brief. We have had from hon. Members on both sides of the House a bit of nostalgia and a trip down memory lane. My hon. Friends talked about the one-legged diver and the old cartoons. They were both a bit before my time.
I was born practically in the shadow of the overhead railway. The right hon. Member for Crosby (Mr. Page) quoted one or two lines from a song made famous by the Spinners, "In My Liverpool Home". I think that the only Members

who were born in Liverpool dockland are myself and my hon. Friend the Member for Liverpool, Garston (Mr. Loyden). The opening words of the song are
I was born in Liverpool, down by the docks.
The third verse tells of the bombing of Liverpool dockland during the last war and says:
When the smoke and the dust had cleared from the air, 'Thank God', said the old man 'The pierhead's still there.'
If we close the ferries, if we close the landing stage, the promoters will have achieved, in finishing the pierhead, a feat that even Hitler could not manage.
I have strong reservations about any closure of the ferry. The issue was discussed at a meeting of the general management committee of my constituency Labour Party. Although very few of my constituents use the Birkenhead ferry or the Wallasey ferry, it was the overwhelming wish of those present that we should support the retention of the ferries. They are part of our heritage, our culture, our way of life. They should be kept, even if it means subsidies from the local authority, from the Merseyside County Council.
Another issue that concerns a number of my constituents and hon. Members is the future of the "Royal Iris". We believe that we should still have leisure trips for aged people and educational trips for the schoolchildren. It is imperative that there be some form of transport on the Mersey.
No one needs to be reminded of the sad decline of the port of Liverpool. We remember how, years ago, the great passenger liners were to be seen in the river, the great ships of Cunard, White Star and Canadian Pacific. They have all gone. As recently as Tuesday of this week, my right hon. Friend the Prime Minister said that when he visited Liverpool in 1948 as a young junior Minister the port was a bustle of activity. On his visit as Prime Minister last September he found it very quiet. It would be tragic if we closed the ferries and stopped leisure trips.
My hon. Friend the Member for West Derby said that the Wallasey Labour Party was opposed to the withdrawal of the ferries. I have received a letter


from the prospective Labour candidate, Miss Hilary Hodge, saying:
The MPTE requires no Parliamentary permission to close the Wallasey Ferry but only the Birkenhead Ferry which is under Royal Charter. All local Labour Parties support the retention of the ferries and on 21st March Councillor Sefton met and discussed the matter with influential representatives of both the Wirral and Wallasey Labour Parties. He promised a public inquiry—but not before the Bill goes through. The local representatives of the Labour parties are not happy with this and still want the Bill deferred until after an indelendent inquiry has been held.
I fully support hon. Members' pleas that there should be a full, independent, public inquiry on Merseyside before any decision is made on the withdrawal of the ferries. I would warmly welcome such an inquiry, under an independent chairman, to look into all the points raised by hon. Members in this debate.
The question of overriding on buses concerns me very much. It was also discussed at my party meeting, when members expressed their concern about the effects that this proposition could have. I am pleased that my hon. Friend the Member for West Derby said that the promoters have decided to withdraw the question of fines on the spot and further fines if those concerned have not the correct money with them at the time. My objection is not so much to the fining of a person £1 on the spot, or £2 at a later stage. It is with the great possibility that more disorder, more chaos and more trouble would be caused on the Liverpool buses, particularly at weekends, and especially after young people had been into Liverpool and enjoyed themselves and were then approached by a bus inspector and told "You have gone past your stop. We will now charge you a minimum of 56p."
The hon. Member for Wirral (Mr. Hunt) is right—the police have not been consulted, at least not in any great depth. This afternoon I spoke to the Deputy Chief Constable of Merseyside and asked for the views of the force on the question of on-the-spot fines and the obvious involvement of the police if any trouble were to break out. I made a note of the points he raised.
The deputy chief constable's view was that this would not be progressive legislation and would lead to all forms of trouble for the bus crews and to additional

work for the police. As far as he was aware—and as far I am aware—there is no such legislation covering any other form of public transport in this country. When representatives of the MPTE discussed the Bill with Labour Members of Parliament I asked whether any other authority had these powers, and the answer was "No".
I understand that some years ago London Transport tried to introduce a Bill with a similar proposition but withdrew it in face of great opposition. I think, therefore, that it would be wrong for Merseyside now to try to give a lead to other parts of England and Wales in this respect. The deputy chief constable said to me today that although we on Merseyside are proud of the progressive legislation, particularly the social legislation, which Liverpool and Merseyside have pioneered, he does not think that this proposition should be supported, and he believes that Clause 7 would cause more trouble than it is worth.

Mr. Heffer: Does not my hon. Friend agree that unless we get an assurance that Clause 7, even as it stands, will be withdrawn, we should vote down the Bill?

Mr. Parry: I fully agree with my hon. Friend. It was my firm intention, before coming into the Chamber, to divide the House and vote against the Bill. But it appears that the consensus on both sides of the House is that we should give it a Second Reading and that these matters can be thrashed out and clarified in Committee. However, I fully support the view that if Clause 7 is not completely withdrawn we should vote against the Third Reading of the Bill.
Finally, I shall deal with the trade union point of view. This afternoon I telephoned the regional organiser of the Transport and General Workers' Union, Mr. George Hodgson, who is responsible for bus crews—the drivers and conductors—and inspectors. I asked him whether he was satisfied with Clause 7. He said that as far as he and his members were concerned it was a non-starter and would lead to all sorts of difficulties for bus crews. It would cause more aggravation and more punch-ups. The crews already have enough problems dealing with drunks and difficult passengers at weekends without having these extra worries and responsibilities placed on their shoulders.
I am prepared to allow the Bill to receive a Second Reading, but, in view of the obvious concern shown by hon. Members on both sides, a number of issues will have to receive very close examination in Committee.

9.1 p.m.

Mrs. Lynda Chalker: This evening's debate has been interesting. I apologise to the hon. Member for Liverpool, Walton (Mr. Heffer) for not being able to hear his speech. I had to slip out of the Chamber, having been here for a rather long time.
It seems that in looking at the Bill, there has been a real Merseyside spirit, which is very welcome. I echo the words of my hon. Friend the Member for Wirral (Mr. Hunt), who said that if we could manage to put our heads together more often to discuss some of Merseyside's problems we might even do more for Merseyside than we do individually. Last year we had a joint meeting with Merseyside County Council. It did not do anyone any harm, and I think it did us a lot of good, to know more of what the county council officers thought and also what Labour Members from Merseyside thought about the issues that arose.
I make an earnest request to Labour Members that we should put our heads together on more occasions. It usually seems to have a productive outcome. I am not prepared to enter into a coalition, except on Merseyside issues, but this is essentially a Merseyside issue and, therefore, I am prepared to go into the subject at perhaps slightly shorter length than is my hon. Friend the Member for Wirral.
It is important that we understand the Bill. The first intimation that I received in writing of the onset of the Merseyside Passenger Transport Bill was a letter on 10th November last. I immediately wrote at the top "Please get very full briefing for me from all quarters". I knew even at that stage that some hard decisions would be put before us.
After that, information started to trickle through, although not at that time from the Merseyside PTE. We eventually had a meeting on 25th January last which came at the same time as or perhaps a couple of days in advance of the Bill becoming available in the House.

From that day forward my hon. Friend the Member for Wirral and my right hon. Friend the Member for Crosby (Mr. Page) and Labour Members have been resolved to make sure that the Bill should not proceed one step further unless there was a full and adequate procedure for a proper public inquiry on each of the two ferries, taken individually because the needs of the communities served by the ferries are slightly different.
The fight which started in January, after the preparation of two months before, also led me to look at who else had been consulted. If it serves as a warning to any other county council or body seeking to promote a Private Bill in the House, the experience that we have had in the last four months will have been useful.
When I met the Chief Constable of Merseyside two months ago and casually mentioned to him the coming of the Bill, he said "What are you talking about? What do you mean about on-the-spot fines?" I began to feel that there had been a slight lack of consultation. I immediately put in his hands all the information I could which affected Clause 7. I also discussed with him the other implications of the Bill, because any change in transportation across the Mersey which called for increased bus traffic within Wirral obviously must have implications for the police. Thank goodness I did all these things, because the contact between the Chief Constable of Merseyside and myself, I am reliably informed, was the first he had had on the issues in the Bill which affected the Merseyside police force.
In the course of my other inquiries about the feelings of people towards the proposals, I discovered that the trades council members were apprised through the Press and by individual Members of Parliament. They were relatively uninformed and had certainly not been consulted during the drafting of the Bill.
There is an important lesson here for government, be it local or national. It must be realised that gone are the days when anybody could or should rule from on high. People, irrespective of their position, expect to be consulted. They wish to participate. I hope that the efforts that have been put in by hon. Members and others will now ensure that they are fully consulted on future occasions


when their views will be of immense value.
We had a battle for the public inquiry. I say that because, although I have had nothing but help from the officials, there were times when I thought I was more likely to be called a battle-axe than a Britannia over this issue. In all our requests for the public inquiry, our principal concern has been that it should be open. I have been at variance with some of my party colleagues on the Wirral Borough Council on whether a decision on the outcome of the inquiry should be taken at local or national level. I believe that this is a Merseyside issue and that it should be decided on Merseyside.
I shall come in a moment to some comments by the borough council concerning a proposed alternative should we fail in Committee in putting forward the interests of Wirral and Liverpool.
I was a little taken aback by the surprise of people at our request for a public inquiry. The statements made about the Bill, copies of which hon. Members received through the post yesterday, give us some grounds now, however, for reasonable contentment. Two months ago I would never have believed that we would see such a thing as the annexe and the statement and that there would be every intention of introducing them in Committee.
The annexe is headed
Public consultation before a decision is taken for closure of either of the Mersey ferries.
It states:
A Public Inquiry will be held on Merseyside".
There is to be one public inquiry, but I am assured that the future of the two ferries will be decided separately and that if decisions are made to close them they will be embodied in separate orders.
The annexe continues:
The Chairman of the Inquiry will be selected by the six Merseyside local authorities.
That, I believe, is very fair. If there should be any difficulty in appointing the chairman, I would readily agree with the hon. Member for Liverpool, Scotland Exchange (Mr. Parry) that he should come from the panel of chairmen and be someone who is used to such procedures.
At one stage during our deliberations with the promoters' parliamentary agents we suggested that there should be a limitation, as in normal planning inquiries, on the time that any one local authority could hold up the appointment of a chairman. If this matter goes to a public inquiry, the time should be spent on the inquiry and not in arguing about who is or is not acceptable. I am sure that we can overcome those problems provided that we eventually have a full public inquiry.
The third item of the annexe reads:
Any person or organisation will be entitled to make verbal or written representations to the Inquiry.
This is important, because there was a time when the promoters suggested that the "person or organisation" should be more or less at the discretion of the county council. That would not have been right, and I am glad that in putting forward this statement they have withdrawn their limitation on who could give verbal or written evidence.
The fourth item reads:
Before a final decision as to possible closure of the Ferries is taken, all the Merseyside District Councils will be asked to make recommendations to the County Council.
That is one on which the chairman of the county council, Councillor Sefton, is hoping to persuade the Wirral District Council to drop one of its requests.
The fifth item reads:
All local Members of Parliament will be specifically requested to submit their comments to both the County Council and the Inquiry.
If they thought that they were going to get away without our submitting our comments to the public inquiry and the county council, they have another think coming.
The sixth and final item reads:
If called for, public meetings will be held on both sides of the river.
If public meetings are called for, they should be held in both Birkenhead and Wallasey. As I have already said, the situation is different and there should be three different meetings, in Liverpool, Birkenhead and Wallasey. I have requested these meetings, in addition to the public inquiry, because there will be many people who will be utterly intimidated by the proceedings at a public inquiry. I cannot say that I am not one


of them. People would be quite prepared to go along to a public meeting whether it was organised by the Friends of the Ferries, now being set up, or by some other local body. Whatever happens, full consultations will take place.
I am delighted that there has been a constructive attitude from all parties concerned. I was particularly happy that the leader of the Labour group on the Wirral Borough Council, Councillor Bill Wells, after a full council meeting on 26th February, announced:
I have come in recent weeks, personally, from a position where I felt that because of the enormous losses on the ferries, they would have to go. I'm becoming more and more concerned that because of the public reaction second thoughts must be had by the Merseyside County Council on the closure of the ferries.
Anyone who knows Merseyside and Bill Wells, will know that his shift in opinion is important in this fight over the future of the Mersey ferries.
I cite Bill Wells because he has long been associated with the needs of Wallasey and Wirral and he is a doughty partner, to put it mildly. Sometimes we find ourselves on the same side, just as the hon. Member for Liverpool, West Derby (Mr. Ogden) and I find ourselves on the same side occasionally.

Mr. Heffer: The hon. Lady says that we should all join together and work together. I do not disagree with that, up to a point. I must ask her an important question. The Labour Party has always believe that there must be subsidies. The hon. Lady's party is constantly talking about getting rid of them. I do not want a hypocritical answer from the hon. Lady. Does she believe in subsidies? It is important to have an answer, otherwise all our arguments are simply sentimental nonsense. If the ferries are to continue, either as amenities or as a regular service, we must recognise that there will be either sky-high fares or subsidies on a quite substantial scale. The hon. Lady must give me an answer on that.

Mrs. Chalker: The hon. Gentleman has beaten me to the little paragraph I was going to put in on that subject. I noticed the excess expenditure by Merseyside County Council on passenger transport. It spent £23·8 million in excess of income for 1975–76. For the ferries, we

are talking about a figure of £1 million. I know that we are talking, in terms of the overriding loss, of around £2 million. It all adds up. I have been looking through the many reports that have been written about Merseyside transport and at the number of ways that have been examined with a view to reducing the overall deficit which arises because of the cost limits imposed on the county council and the subsequent reduction in the money available to implement the transport policy.
There is always the argument—fairly and rightly used for historic buildings—that a case exists for some subsidy. It cannot be as great as the subsidy currently applying on the ferries. We have heard that the subsidy on a 12p crossing fare is about 20p. Perhaps we should move a little more towards asking for a greater contribution from the user, as has happened on the railways crossing the Mersey.
There are a number of ways in which the overall cost of the ferries could be reduced. The inquiries and discussions which will come about, partly as a result of this debate and partly because of these proposals, can do nothing but good in making the Merseyside Passenger Transport Executive examine possible ways of cutting expenditure. I am sure that that will be done.
I return to the decision taken by the Wirral Borough Council. We have heard from the hon. Member for West Derby that it wanted a two-thirds majority should the county council wish to take a vote against the decision of the chairman of the inquiry. That was a compromise position. The original request of the borough council was that there should be a two-thirds majority in any event. I am told that at a meeting yesterday with Councillor Sefton, the leader of the Merseyside County Council, there was an instruction from the Wirral Borough Council to be tabled to the MPTE which read:
That it be an Instruction to the Committee on the BPTE Bill to require the consent of the Secretary of State to the discontinuance of any of the ferry services referred to in Clause 4 of the Bill.
I do not know whether that will be a clause which will be accepted in Committee. That is the resolve of the committee, made up of all political parties on the Wirral Borough Council.
Negotiations were taking place yesterday morning with Councillor Sefton in the hope that further assurances could be obtained from him on behalf of the county council and to see what more could be clone to bring the two sides together. Those consultations will continue, and the Wirral Borough Council will continue to send its view to members of the Committee which examines the Bill.
Throughout the discussion leading to the Second Reading—on which we have had to insist—we have had a number of suggestions about alternative transport. Even before the Bill was produced there was, in the MALTS Report on the needs of Merseyside and local transport, a paragraph about a Wallasey alternative. It is important to realise that there has been concern over at least a 10-year period about the needs of the Wallasey community as opposed to the Birkenhead community.
For those who do not know the area of the Wirral, of which I am speaking, let me explain that a little way up a slight incline from the Woodside, the Birkenhead ferry, is the Hamilton Square Station which links to the Loop and Link Line now being built at a cost of £40 million by the passenger transport executive on behalf of British Rail. There is a walk of slightly over three minutes from the Woodside pierhead. The traveller can be in the station and boarding a train which will take him under the Mersey—not so pleasant, but very often convenient—

Mr. Heffer: It takes four and a half minutes. I walked it every day for years.

Mrs. Chalker: Perhaps the hon. Member for Walton walks slowly, or perhaps the road barriers have changed during the last few years since he did that walk regularly.
To Wallasey the railway line goes via Hamilton Square and then through my constituency. It curves round the northern part of the Wirral peninsula and ceases at New Brighton. Between there and the landing stage of Seacombe Ferry, which is on the Mersey side of the Wirral, there are only bus routes and no train routes. There is a delightful promenade but there is no means—except for occasional buses, and believe me, they are occasional, or so it seems when one has to wait for

them—to get to New Brighton rail terminus from the Seacombe area.
There are many people who live in that part of the Wallasey constituency who are on lower incomes and who walk to the ferry daily. Some of them, as my hon. Friend the Member for Wirral said, go by bicycle. A tremendous number of people from that area have never thought of going to Liverpool by any other means than the ferry. They are the people who live in the Egremont and Liscard districts of Wallasey. They and people who live in Seacombe and Poulton have always found that that way of crossing the Mersey is not only pleasant but useful. People from this area have been crossing the Mersey by ferry for many years. We know that people come from other parts to join the Seacombe ferry, and it can be argued that the buses they use could be sent elsewhere. Some people arrive by car, but they are few compared with those who walk or who come by bus.
As an alternative to the Seacombe to Liverpool ferry, we have had shown to us by the MPTE maps of bus routes that could be put in its place. These bus routes look fine now, but we note the experience of my right hon. Friend the Member for Crosby in his area. We have seen details of the routes given in the Liverpool Press, but we wonder how they would work and whether they would be as easy as they seem on the planners' piece of paper when it comes to reality for the people of Egremont, Poulton, Liscard and Seacombe in using that means of transport through the tunnel.
But that is not a part of the Bill. The Bill gives the power to remove the existing service. I looked at the costings that have been given to us by the MPTE and others and I wondered how many of the ferries and how much of our heritage could be protected by a limited subsidy. I know that other ferries in the country, such as the Humber ferry, receive subsidy. When the Humber Bridge is finished, that ferry will go, but the Humber Bridge is a different and direct form of replacement compared with the alternatives for crossing the Mersey.
There are other problems in the Bill that must be faced. I received a request tonight from a constituent who was waiting outside but whom I unfortunately could not see because of business in the


Chamber. My constituent had come to London from Wallasey on behalf of a group of people who live in the New Brighton area. They say in a letter that they believe that the Wallasey ferry is a vital means of transport to Liverpool. I have had many letters saying that the new rail link is not the way in which people wish to cross the Mersey. They take the ferry for a variety of reasons. If the ferries were to remain, I believe that people would be prepared to pay a little more on their daily fares than at present.
Hon. Members have received many such letters on this subject, and so have my colleagues in the constituency. They also ask that the Bill should not receive a Second Reading and that a public inquiry should be held first. It would be possible to deal with the Wallasey ferry under the old Wallasey Corporation Act, but that would not give protection for the Birkenhead ferry and, because of the need for that ferry, I am not sure that this would be the best way to proceed.
Since the beginning of the argument, we have made a great deal of progress with the MPTE leading up to the annexe to the statement that I read earlier. There is information in the MALTS Report, and paragraph 338 deals with the potential demand through the Wallasey Tunnel and similar demand on the railway. Information has been quoted from other reports on transportation in the Merseyside Region and many transportation reports have been prepared by the county council. A lot more information must be given at the public inquiry before an order is made to do away with either of the ferries.
I am assured that the proposals in the statement from the promoters will be put into the Bill in Committee. If that happens, and if we have a satisfactory Committee manned by hon. Members from regions other than Merseyside, I do not believe that the Bill should be held back. We can block it if we wish at a later stage. If the assurances that we have been given are not fully carried out, I shall have no hesitation in seeking to persuade my hon. Friends and hon. Members opposite to block the Bill.
I do not often stand around in Liverpool late at night. It is not a sensible

thing to do. However, on occasions I drive through Liverpool late at night, and I should be reluctant to put on bus inspectors at any time of the day the responsibility for collecting control fares.
One has only to see how a normally calm person deals with a traffic warden putting a ticket on his car to see how tempers can be unreasonably raised when someone is caught doing something that he should not be doing. If we multiply the vexatious driver in London's temperature by the heat of the moment that sometimes occurs on Merseyside, with all the passion of Scouseland, I should be unwilling to see inspectors putting their heads in a noose by being forced to collect control fares.
I recognise the problem faced by the executive in trying to stop people using buses illegally. I sympathise with the view of the hon. Member for Garston that this did not happen when we had conductors as well as drivers. We must consider zoning fares or some other way of getting round the £2 million loss that, we are told, results from people travelling with inadequate tickets.
I hope that the Committee which considers the Bill will bring together the views of the trade unions and police on this issue and of the police and all those involved in the transportation changes and in assessing alternative transport systems. I hope that my constituents, the people of Wirral and Birkenhead and the other users of the ferries will see that they have the chance and voice to fight the county council over the closure of the ferries, thanks to the pressure of hon. Members.
If the inquiry decides that the ferries should remain as they are, that will be a challenge to the MPTE to find the resources. If the inquiry decides to close either one or both of the ferries, I want to see in the coming weeks how we can resolve the current anxiety of the Wirral Borough Council against the Merseyside County Council about the way in which the final decision should be taken. It is important that we should resolve that at a time when we can amend the legislation, and not afterwards.
On an earlier Bill tonight the Government literally came to us at the eleventh hour and tabled an important amendment. It was an amendment that we saw only this morning. That ability is vital. The


Government tabled the amendment during the passage of the Bill. If they had not done so, they would have had to come back to the House with yet another piece of legislation. That is a good lesson for the promoters of this Bill. We should look at it while we have the chance and ensure that whatever emerges at the end is right. We must also ensure that the public inquiry provides a proper hearing for the people of Wallasey, Wirral and Liverpool.

9.32 p.m.

Mr. Ogden: With the leave of the House, I shall reply to the debate. The hon. Member for Wallasey (Mrs. Chalker) made an impressive contribution to the debate. She has fulfilled the promise that she made when she first came to the House. If we must have Conservative hon. Members representing Merseyside constituencies, let them be of the quality of the hon. Member.
Our agreements in the debate have been greater than our disagreements. Hon. Members on both sides have correctly voiced their particular anxieties and concern about the proposed Bill. No hon. Member is actively seeking to sink the ferries. No hon. Member is happy that people do not pay the right fare for travelling on Liverpool buses. I have accepted responsibilities that I have no reason to accept, but someone had to do it. There is no reward or glory attached to promoting a Bill. I did what had to he done. I am drawing heavily on the regard, affection and trust of my hon. Friends and Opposition Members.
I have given assurances, but I must tell hon. Members that the interest that I have taken in the Bill is no more than that taken by anyone else. I have given assurances on behalf of the MPTE. My good name is at stake if those assurances are not carried through. If they are not there will be no sponsor of the Bill.

Mr. David Hunt: Are there any assurances for which I asked in my speech that the hon. Member is not prepared to give?

Mr. Ogden: I cannot remember everything that the hon. Member said but I shall carefully read all that was said in the debate and so will members of the MPTE. There will be replies and a continuation of the discussion. This is not

my Bill. It is not the Government's Bill and it is not the MPTE's Bill. It is the Bill of the hon. Members who represent Merseyside constituencies. I shall carry the matter through, and there will be a special report.
The only thing that I am asking is that the House should give the Bill a Second Reading. As my hon. Friend the Minister has said, let the convention apply and let the Bill go to Committee.
Our interest is constant and continuing. All of us, I hope, want the same kind of thing, on the basis that if the promises that I and others have made are not carried through on Report and Third Reading there will be united opposition in the House and the Bill will get no further. With those assurances I ask the House to give the Bill an unopposed Second Reading.

Question put and agreed to.

Bill accordingly read a Second time and committed.

SOCIAL SECURITY

Postponed Proceeding on Motion, That the Family Income Supplements (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved, resumed.

9.36 p.m.

The Under-Secretary of State for Health and Social Security (Mr. Eric Deakins): I think that it would be for the convenience of the House if I went back to the start of the sentence in which I was interrupted at 7 o'clock.
This deals with the core of the problem: taking the overall situation for families receiving FIS, together with housing benefits, free school meals and free milk and vitamins, we have got as near as practicable to the break-even point by arrangements that actually give some small gains at the changeover point, in many cases, to lone parent families and larger families in particular.
There are, in fact, only two small groups who could lose, and then only a few pence a week. The first group comprises about 5,000 families receiving rent and rate rebates, who could lose about 3p a week. The other group is a very small number of one-parent families


receiving a rate rebate only, who could lose, at most, 7p a week. This second group is so small that we cannot make a reliable estimate of the number involved. So much for the April proposals.

Mr. Patrick Jerkin: One begins to see how meticulous all this has to be if the Government are to do both of the things to which the Minister referred in the earlier part of his speech. How far is this due to the fact that child benefit is being phased in and that the first stage involves only an extra 30p for the average family? Perhaps I may put the matter more clearly. If child benefit had been done at one blow, with a much bigger reduction in tax and a much bigger child benefit, how far would the same complications have arisen for FIS, rent rebate, school milk, and all the rest?

Mr. Deakins: I would be prepared to say that the complications would still have arisen—perhaps not to the same extent—with a larger child benefit for as long as we went on with a means-tested benefit such as FIS. This is the essential point. In an earlier debate the right hon. Gentleman talked about the time when perhaps, we could get over to a full child benefit scheme and, perhaps, even do away with FIS. As a step in the direction of tax credits, this problem would not arise, but in the various steps towards that, we shall have this sort of difficulty.
I come now to the second part of my remarks. As I said earlier, the computation regulations also propose an increase of £2·50 in the basic prescribed amount from 19th July. For the past three years, FIS has been uprated in July, whereas the main social security uprating has been in November. It would be sensible to achieve a common uprating date. We propose to do just that by making the uprating for which these regulations provide an interim one, pending the main uprating in November. However, to protect familities from losing FIS simply because they may have received a pay increase in line with the pay guidelines it is necessary to increase the prescribed amount within a year of the last up-rating.
An essential feature of this year's proposals, therefore, is that the July uprating is designed to preserve the status quo for those receiving FIS at that time. The increase of £2·50 in the basic prescribed amount, from £39 to £41·50, is therefore sufficient to protect any family from losing FIS if it has had a pay rise since last August. This is the effect of Regulation 4 of these computation regulations, and an illustration is given in paragraph 14 of the note.
I turn now to the cost of these proposals. What I think the House will wish to be informed of here, where we are dealing with the lower paid, is the extent of the beneficial change. I believe it will be most helpful if I give three figures. Present expenditure on FIS is £18 million a year. The cost of the April changes to November 1977 will be £2 million, and of the July uprating to November 1977 £1 million.
I have given the costs to November because, as I have explained, the second stage of the FIS uprating will be in November.
As far as numbers of FIS beneficiaries are concerned, our latest estimate of take-up is about three-quarters. On this basis, we estimate that immediately prior to 5th April the number of beneficiaries will be about 80,000, rising to 82,000 between April and 19th July, and thereafter rising to a peak load of about 84,000. These marginal Increases are not part of a deliberate policy of increasing the numbers on a means-tested benefit. That must be clear to the House after all that I have said on the subject. They arise solely as a result of our aim to ensure that no one loses, either because of the introduction of child benefit or because of a pay increase under the pay guidelines.
As in previous years the changeover to new rates will be effected with the minimum inconvenience to beneficiaries. As hon. Members will know from the replies to Questions from my hon. Friend the Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January and 15th February, order books have been recalled so that the necessary adjustments—for April and July—could be made simultaneously, subject to Parliament approving our proposals. The


Department's staff at Blackpool have done a splendid job in this respect.
I hope that what I have said here and in the note will have been sufficient to convince the House that these are fair and reasonable proposals on which we can all agree. With such a wide range of means-tested benefits to contend with, the inevitable price of fairness is solutions that seem complex at first sight. But from the family's point of view, there is no reason why the changes I have described should not all work quite smoothly.
I turn to the other five regulations. The child benefit consequential regulations, as amended by the child benefit consequential amendment regulations, provide for the changes that are necessary because of the introduction of child benefit and its effects on dependency additions for children, which are payable, under the Social Security Act 1975, as an increase of one of the main national insurance or industrial injuries benefits and for certain orphaned children. Qualification for a dependency addition has until now depended on the beneficiary having a family within the meaning of the Family Allowances Act. In future it will depend on the beneficiary—or his wife, if she is residing with him—being entitled to child benefit. The Pneumoconiosis, Byssinosis and Miscellaneous Diseases Benefit (Amendment) Scheme makes comparable changes required to cater for the very small number of beneficiaries under the scheme who have children.
The aim in all this has been to replace existing provisions by broadly comparable provisions, but inevitably, there have been some structural changes. With 29 years' experience of operating the family allowances rules for dependency additions behind us, we have taken the opportunity, offered by the change to child benefit as the basis on which dependency additions will in future be paid, to evolve a set of rules which should allow simpler and easier administration. The regulations may, at first sight, look somewhat complex and forbidding. In part this is due to the need for drafting them in certain ways, but mostly it is due to the need to provide a comprehensive code for all foreseeable eventualities, including circumstances which may affect only a few individuals, or—it may be—even none at the present time.
There are at present no regulations dealing specifically with dependents, and a number of sets of regulations have had to be amended. We have therefore also taken the opportunity, after making certain paving amendments in the Industrial Injuries Benefit (Amendment) Regulations, to consolidate the main dependency provisions of the national insurance and industrial injuries schemes, brought up-to-date by the consequential regulations, into one set of Dependency Regulations. These introduce no additional changes.

9.45 p.m.

Mrs. Lynda Chalker: I welcome the draft regulations and the opportunity to discuss the amendments consequential upon the Child Benefit Act 1975. When I started to read the range of consequential amendments, I wondered whether I was in the right job. It would take hours to pull together the details of the regulations. There are no fewer than 22 separate provisions in the Child Benefit Consequential Regulations, and only slightly fewer—16—in the Dependency Regulations. The others are all interrelated.
I welcome the fact that the Minister hoped that with these regulations we shall have achieved a simpler set of rules for judging the interrelationship of benefits now that the Child Benefit Scheme is to come into operation at long last this April. When these regulations have settled down and we know how the autumn upratings are likely to go, perhaps a comprehensive document can be produced to pull matters together and make it easily understood.
Many people—not only Members of Parliament like myself—find it difficult to pull together the different ways in which the calculations of benefits affect one another.

Mr. Deakins: These are complex regulations. Like the hon. Lady, I got a shock when I read them for the first time—and, I must admit, the only time. I have some very good background notes on the details of the two major sets of regulations, and I should be very happy to place copies in the Library and to provide the hon. Lady with a copy. I do not think that they need to be given wider circulation, but if it would assist her or other hon. Members I shall make


them available. There is nothing secret about them.

Mrs. Chalker: I am grateful to the Under-Secretary for that offer, which I gladly accept. In view of our discussions before 7 o'clock, and since these explanations are not secret, I suggest that they might be sent to the CPAG and the one-parent family groups if that would help them to understand the exact effects.
However, we may have to ask the Minister to produce a simplified version, not just so that the various pressure groups can understand what is going on and can avoid wasting the time of Ministers, nor just so that hon. Members can understand them, but so that people who are entitled to these benefits can understand what is available. This is still a very hazy area for beneficiaries.
Another group who have been bothered by the introduction of child benefit, some of whom are beneficiaries under the family income supplement, are the widows, often represented by the National Association of Widows. Two of the groups whom we mentioned before the break should also receive this information.
The Minister has moved the adoption of the regulations and I do not need to move their annulment in this case, but I want to contrast the situation now with that of 10 months ago. When we debated the FIS uprating last year, my hon. Friend the Member for Rushcliffe (Mr. Clarke) said that it was difficult to find out what was happening and that we had been questioning but getting no information. He said:
It has been difficult to get any information from the Government in recent weeks about their policy intentions on family poverty and family support."—[Official Report, 20th May 1976; Vol. 911, c. 1885.]
The situation is very different now. We have had a mass of Parliamentary Questions on FIS and child benefit and how they will work together with passport and other means-tested benefits. We had discussions, even in Questions to the Chancellor of the Exchequer today, on the interrelationship between child tax allowance and child benefit. The fact is that some people have been sent erroneous codings because it is not clear how the tax allowance and the child benefit will work together.
Everyone is aware that things are happening, but people are not aware of the exact effect that these things will have on them. The Opposition believe that there should be a proper system of family support in this country. When we discussed the FIS uprating last year, we were doing so in the dark. That discussion occurred on 20th May. Five days later we had the bombshell of the part scheme of child benefit rather than the full scheme.
We have seen something else happening. We have seen the number of people dependent on benefits actually growing in the last few years, and the fact is that we still have to place reliance on the FIS scheme, as shown in a parliamentary answer given to me on 17th May:
The Family Income Supplement scheme will continue after the introduction of child benefits."—[Official Report, 17th May 1976; Vol. 911, c. 422.]
We find an increasing dependency on FIS among low income families.
I do not think that we should allow the evening to pass without a few words about this problem and the fact that the number of low-paid families is growing and not diminishing. On 8th February this year the Secretary of State for Social Services said that 60,000 families were subject to a 75 per cent. marginal rate of taxation with an increase of pay of only £1, at December 1974. By December 1975 this number had risen to 90,000. I accept that the sampling error involved in calculating this from the Family Expenditure Survey is large, but from other statistical information we can see that the trend is upwards. More families actually need FIS because of the influence of low tax thresholds, and dependency on FIS and means-tested benefits is bringing more families into the poverty trap.
I cannot read the crystal ball of the Chancellor of the Exchequer. But there is no doubt that we have a strategically worsening situation. In the last three years the lot of low-paid families has worsened, and it is time that the Chancellor sought out his friends in the DHSS and released the burden put around their necks in trying to cope with the problem that is worrying Members on all sides of the House.
This year we are having a different debate. The Government have tried exceedingly hard to ensure that no one ends up worse off than before. But it


is a big problem because FIS is a benefit with a 50 per cent. taper. Other means-tested benefits offer dependency on FIS, such as free school meals through the passport, or rent and rate rebates which may come separately or not.
With a low level of tax threshold and with increases in rents and subsequent decreases in rebates, many people, even if they earn only a pound or two more, are well below the FIS entitlement level and find themselves worse off for working a little longer in trying to obtain a little more money. That situation cannot continue. It arises because of the basic failure of the Government to bring together a cohesive family income policy.
We all know that the Government's only scheme this Session was an emasculated Child Benefit Scheme. They jeered at the Family Income Supplement Scheme in 1970–71, but only a year ago they cheered when they discovered that that was the only way out of their difficulties.
In all our debates and discussions, we have arrived at the stage when there is no clear Government policy in respect of family income support. Many of us are surprised at that, and we hope to see a change, with the help of the Chancellor of the Exchequer backing those in the Labour Party who want to see a proper system of family support.
Even sadder is the fact that the Government have had to abandon the tax credit scheme that we left when we came out of Government early in 1974. It is all very well to throw out the baby with the bathwater in a change of Government, but it is not wise to refuse to examine at matter which the poverty lobby in general, and many eminent economists and sociologists, felt would be the answer to the problem posed by low-earning families. That was one of the saddest happenings in the story when the right hon. Member for Blackburn (Mrs. Castle) was Secretary of State for Social Services.
On top of all this we have seen the continuing failure of the Government to curb inflation, which has made the situation much worse. Despite my hostility to the Government for failing to bring forward a proper family support system, we welcome the FIS regulations but voice a strong note of caution. The fact is that there can be only a further stopgap. We

cannot go on raising family income supplement, changing tax thresholds and making more and more families dependent on means-tested benefits. The Minister has said so, yet there is now no way out of it, unless the family policy is thought through. That is what we wait to see from the Government.
The Conservatives' instruction of FIS for low-paid families was—we admitted it and we still do—a stopgap, but we were working towards our tax credit proposals and were seeking to bring them into operation gradually—I emphasised that the process was to be gradual—a first part to the child credit scheme, and then a fuller scheme. We thought that in the middle or late 1970 we would see the end of the FIS and would have moved to a full Child Benefits Scheme, not just to the present half-hearted situation.
The Minister will know that there is considerable pressure in the country to implement the Labour Government's first intention—namely that child tax allowances, which often go to the husband and straight into his pocket, should become the income of the wife for the children.
It was interesting to see the results of a survey conducted by a women's magazine. It was probably not carried out with absolute accuracy, but at least it gives us a guide to thinking among its readers. It revealed some disquieting facts. It concluded that one in five of the wives questioned about their housekeeping situation had been given no increase in housekeeping money, even though in the year in question prices had risen by 26 per cent. Of the poorest wives trying to keep house on £10 a week or less, one-third had had no increase at all. However, 58 per cent. of the husbands who had not given their wives any extra money, even though they were the sole providers of housekeeping money, had had a pay rise during the previous year. It was that situation—of the men who had the pay rises but did not pass some of it on to their wives—that child benefit sought to avoid.
At present it is not avoiding that situation because it means an effective 30p or 62½p in the hands of the housewife and does not make a scrap of difference when one considers the size of increases in household prices, particularly children's clothing prices, with which families are trying to cope.
Having voiced our caution over the extension of FIS, because of its widening of the poverty trap, we should make sure that we carry on the review, which has been going on already, into the way in which FIS works. I gather from the public expenditure estimates for last year that some 60,000 families were expected to receive FIS. According to the figures released at the end of 1975, about 67,500 families were receiving FIS, of whom 32,300 were one-parent families.
One of the things with which we have to cope is the increase in one-parent families. In 1971, 32 per cent. of the recipients of FIS were one-parent families. By 1974 the proportion had risen to 50 per cent. I do not have the figures for 1975 or 1976, and I should be glad to know from the Minister what they are. I know, however, that the number of one-parent families is increasing at a very fast rate and that those on low incomes will have a much greater dependency on FIS.
We have heard from the Minister the actual number of recipients. In July it will be about 82,000, and perhaps by November it will settle at about 84,000. That is quite an increase on the public expenditure figures, which in the coming year reveal that only about 70,000 families are expected to be recipients of FIS. Obviously the public expenditure estimates and the actual costs in the financial year 1977–78 must be adjusted because of these new figures.
But if we are to see a worsening situation in terms of the number of families supported by one person and an increased dependency on this benefit, we must, as the Minister rightly said, keep in mind the whole question of the level of FIS for as long as it remains. What we really have to cope with is the Government's failure to produce a system of taxation and benefit together—in other words, a tax credit system.
If the Minister did one good thing tonight, it would be to tell us that someone in the Government is actually looking at the movement of taxation and benefits through a simplified scheme. Tax credits are the only way we can get out of the situation in which the standard of living not only of low-income families but of many other families and retired people is going down and down. The longer the Government delay having a

good look at what can be done, the harsher we shall make it for families, particularly families with children and single parents, who are trying to cope.
I want to go on to the actual improvements contained in the draft regulations. They seem to be fairly limited in the way in which FIS and child benefit work together. We find that the FIS entitlement of a one-child, two parent family earning £30 a week is £4·50. After the introduction of the Child Benefit Scheme they will be 30p a week better off because of the £1 benefit for the first child, the benefit for the second child being cancelled out by loss of the former family allowance. Then they lose the child tax allowance to a value of 70p. From July, because of the adjustments in FIS, there will be an extra 75p a week for such a family, as far as I can judge.
Looking through a number of different family circumstances, I have become very depressed. I have found that, because they do not pay tax, a two-parent, one-child family with earnings of only £22 a week will be no better off after the July upratings. That is my conclusion on the calculations I carried out before the Minister's document came before us, and I do not think that it alters them. It will be receiving the same amount of family income supplement and simply an adjustment of 30p for child benefit in July. They will be £9·30 a week better off instead of £9 a week better off. A basic worry that we shall face over and over again is that up to certain levels of income without adjustments, where tax is not paid, they will be dependent on the ceiling of FIS, which must continue.
The Minister explained that the prescribed amounts would be changed from July and that there would be further changes in November. Does he envisage a change in the maximum amount of benefit in November? That is the only thing that can save the low-earning family with children, who at present will gain no real benefit, other than the 30p, from the child benefit in April, accompanied by the uprating of FIS in July. We should be turning more attention to the very poorest families when we consider some of those upratings. Going through different sizes of family earning slightly different amounts, we find it easy to see that the increase in FIS resulting from


these regulations, plus the increase in child benefit, is minimal compared with the increased expenditure that these families, like all families, face in a time of continuing high inflation.
Therefore, although we welcome the small help that can be given by the Government, we are in no way satisfied with the Government proposals for family support. We understand the difficulty in reducing dependence on means-tested benefits. I was relieved to read a letter of 9th March from the Minister for Social Security to my right hon. Friend the Member for Wanstead and Woodford (Mr. Jenkin), in which he said:
We fully accept the proposal that the improvement of universal benefits should reduce dependence on means-tested benefits.
We all agree, but the Government are in charge and they are not really doing anything about it. In fact, things are getting worse. Although we understand their problem, it is up to them to act. There is little that any Opposition can do to make them act, except what we hope to do before too long.
The other aspect of the work that we are considering tonight is the whole question whether the benefits that accompany FIS will still be received in full. There has been a whole series of questions and answers on this. I should like to quote an answer given to the hon. Member for Islington, South and Finsbury (Mr. Cunningham) on 28th January concerning the outcome of all the passport benefits in the light of the introduction of child benefits in April. The Minister for Social Security said:
Existing discretionary powers will be used to protect from net income loss all families receiving free welfare milk and vitamins by direct claim on grounds of low income."—[Official Report, 28th January 1977; Vol. 924, c. 790.]
I hops that it is correct to say that that is still the situation. I question it, because we have continually had answers that say that some people might be a little worse off, that some people might lose out just a little—a very small number—but we have on record contradictory statements about the way in which some of the benefits come forward and what will be received.
In an answer to me on 14th March, the Minister for Social Security said that the arrangements for means-tested benefits

not obtained through a passport are necessary rather different from those through supplementary benefit, where none of the child benefit is disregarded. He hoped that a common objective would be that people should break even in receipt of benefits, and make minimal gains and exceptionally minimal losses. We, too, hope that it will be a case of exceptionally minimal losses, but I have to tell the Minster that information is already coming in from various local authorities indicating that school meals are going to be a grave problem.
The regulations that we were promised in another parliamentary answer on 4th March, dealing with revisions in school meals, are urgent. I am aware that they are the responsibility of the Department of Education and Science. We seem to be having less co-operation by the Department of Education and Science with the Department of Health and Social Security than we would wish. That applied to an earlier measure, as it does now.
The regulations that we are discussing and the Child Benefit Scheme are to begin operation in April. When are we to get regulations from the Department of Education and Science that will deal with the amount of child benefit to be disregarded in assessing eligibility for free school meals for families in receipt of FIS? If it is not done quickly the increase in school meal costs and other difficulties that local authorities are facing will complicate the matter still further.
It would be easy to continue commenting about the whole way in which the system of family support is not working, despite the many and different efforts. I do not think that one can ever blame one Minister, but one can blame one Administration for this system, which is getting not better but worse. When I looked at the complexity of these regulations—a complexity that the Minister has clarified a little tonight, and that he says he will clarify further—it seemed to me that they had been designed for lawyers by lawyers and not for hon. Members.
But what concerns me is that when one regulation is made on 1st March about child benefit consequential needs, it is followed up only six days later by another to sort out the situation that exists


in the Social Security Attendance Allowance (No. 2) Regulations 1975 (SI 1975/598). I looked at it and thought "This must cover what has happened this week." Then I realised "No, we are to have another soon", because this week, after a battle lasting three years, we had good sense accepted in another place and announced by the Under-Secretary of State responsible for the disabled, in that we are to allow payment of attendance allowance for severely handicapped children who are being fostered.
We welcome that, but it means our having yet another piece of paper and another set of regulations to deal with attendance allowances. Therefore, I hope that that will be the last one affecting the situation and that the change in the 1975 regulations on attendance allowances will work together with what we already have in these regulations on child benefits. If it does not, there will be yet another set of regulations to come at the end. I hope that we can do it once and for all in the final set that will come.
On Statutory Instrument No. 380, dealing with other diseases, we feel it quite right that all these things should be brought together and that an adequate child benefit will go to the mother. Therefore, there can be no dispute between the Opposition and the Government on this score.
On the dependency regulations, we should make clear that these do not affect overseas dependants. I say that because there is a great deal of concern in the House from Back Benchers on both sides and among others outside the House about how the eventual outcome of the Chancellor's decision on overseas dependants will be enacted in the change from child tax allowances concerning those who will be ineligible for child benefit. I realise that this must come through a Finance Bill, but it is worth saying that these dependency regulations have nothing to do with that. That question has already been asked of me in the House and it is right that it should be on the record.
We have other indications from the final two sets of regulations out of the six on how we shall compute and bring into operation the different time periods before we reach a stage where all upratings

will happen at the same time, from November to November. All these things, taken together, perhaps means a clarification of the system under which we try to work.
There are, of course, still problems. I do not know whether the Minister can tell us tonight how many of the one-child families who will be eligible for child benefit for the first time have so far applied. On the 8th of this month, 2·2 million out of 2·8 million had actually applied. There were still 600,000 one-child families who had not put in their claims, less than one month before the enactment of the child benefit.
I hope that the number of people who have applied has gone up dramatically. I have done my best throughout the country to tell one-child families to put in their claims over the past few weeks, and I hope that the efforts of other hon. Members and publicity in the Press have also helped.
I hope that the Minister can also clarify a matter on which there is misunderstanding. As I understand the Bill, and from discussions that have taken place, it appears that child benefit cannot be claimed in retrospect. I believe that this is a provision of the earlier principal Act with which we are dealing.
Will the Minister confirm whether it will be possible to claim child benefit in retrospect if—through what one feels is a failure of publicity and the absolute chaos of the CH(1)T, CH(1)TA, CH(1) TB, P3(CB) income tax leaflets of last autumn—the muddle which ensued was the result of Government or lack of Government administration. Will the Government take responsibility for that, even if there are 200,000 late claims from one-child families? Will the Government entertain the possibility of paying those families back to the date of 6th April?
If that is not possible, there should be enormous hue and cry in the remaining days before the date of entitlement to child benefit. This is not a clear or satisfactory situation. I have already asked for clear and precise leaflets. Above all, we need guidance for the staff who have to deal with these questions from day to day on the interaction of our benefits system on family support. I have as much sympathy for the staff as


I do for the parents who are struggling to work out how much they are entitled to.
We hope that after the Budget next Tuesday, when the Chancellor has had an opportunity to lift the tax thresholds substantially, there will be proposals for family support to do a great deal more to help the young people whose income is so low that they have to go to the State for additional help. We do not believe that any real progress can come until taxation and benefits are not only discussed together but are enacted together through our system—and that means tax credits.
We have to work towards a reduction in means-tested benefits. I see no sign

of it coming. The saddest thing is when children ask why, when they have had free school meals, they subsequently cannot have them, and why they get them again some months later. This is all the result of not having the right family support system.
We have put many Questions to the Government over many months and we are grateful for the answers we have received. We still await, however, the answers to many problems. If the Government mean what they say about family support, they must not just go on saying it but must actually bring in the only system that will alleviate family poverty—a tax credit system.

10.22 p.m.

Mr. Tony Newton: I rise to support my hon. Friend the Member for Wallasey (Mrs. Chalker), and in doing so I should like formally to move the Prayer which is—

Mr. Speaker: Order. The hon. Gentleman cannot move the Prayer at this stage. We are already discussing a motion which has been moved. He will have the opportunity to move the Prayer at a later stage.

Mr. Newton: Thank you for your guidance, Mr. Speaker. Perhaps I may simply indicate at this stage that I shall be referring to one of the Prayers with a view to moving it later. One of my hon. Friends had indicated to me that he wanted me to refer to it, and that I propose to do.
I should like to support some of the remarks of my hon. Friend the Member for Wallasey and some of the points that were raised before the debate was interrupted at 7 o'clock by the Mersey ferry conservationists, concerning the provision of sufficient information about precisely what the regulations mean and about precisely what is the situation on family income supplement and other aspects of the Child Benefit Scheme.
Until last evening I had not realised that the Prayers were to be discussed tonight. The Vote Office, apparently, had not realised it either. It took the Vote Office some moments to get me the regulations, and I can understand this since it did not know that they were to be debated. When I saw the regulations I was, frankly, appalled. Hon. Members can see this vast wodge of bumf which is littered around me on the Bench and which clearly no sane man would try to understand or could understand in the time between 10 o'clock one evening and 3 or 4 o'clock next afternoon.
We are faced with an almost unbelievable situation. I do not intend to parade myself before the House as having read every word of the regulations or to pretend to understand everything they contain. I understand that the Minister has read them all, but only once. That is not sufficient to enable him to grasp every fine point in them.

Mr. Deakins: The hon. Gentleman is right. One could not possibly hope to

grasp these detailed regulations merely by reading them once. As a Minister I have the inestimable advantage of having civil servants who are expert in these matters and who provide explanatory notes which go into great detail. I can ask questions at meetings. Having read the regulations once, I do not need to refer to them again.

Mr. Newton: Although I have been a Member of the House for only just over three years, I am under no illusion about the advantages of having the backing of the Civil Service in finding one's way through such matters. I do not accuse the Minister of not having done his homework of or failing to understand what he is doing. All of us who have had anything to do with him, either on the Social Security (Miscellaneous Provisions) Bill or on any other matter, have formed the highest respect for his ability to master his brief and the technicalities of the subject.
For us ordinary mortals, it is something of a problem to be confronted with a considerable collection of regulations at relatively short notice. It underlines the point made about the need to try to get some coherent information made more widely available. Such information should be made available not only to Members of Parliament but to that large body of people outside who become involved in advising others on such matters as social security benefits.
With the increasing complexity of our system, there are many people who are asked for advice by those who wish to claim benefits and who do not understand the system. In the interest of the smooth working of the system, and in the interest of keeping down the work load upon Members of Parliament and Departments, we should explain what we are doing and what the regulations mean to the intelligent laymen who provide advice, formal and informal, throughout the country.
I note that the background paper which the Minister has courteously circulated to those of us whom he knew to be interested in the subject—and which he has said he will try to make available


in the Library if not more widely available—specifically says at paragraph 2:
Paragraphs 6 to 13 spell out in detail the effect of the FIS, child benefit and child tax allowances changes in April on FIS awards which are then current, with a series of tables providing 'ready reckoners' which could be used, for example, by Members of Parliament who wished to look up the position of an individual constituent.
That is an admirable aim. I pay tribute to the Minister for having done such a thing.
If ready reckoners are to be provided, they must be put into the hands of those who are likely to use them and thus be permanent references. They must not be left in the Library of the House. They must be readily available to those who are likely to need them. It is not only Members of Parliament who are called upon for advice on these subjects.
In his earlier remarks the Minister referred to other explanatory notes which were available to him. I hope he will take up the suggestion that these should be made more widely available. There is an enormous amount of confusion and there is inadequate information about child benefit as a result of the process that has been gone through in the past year or so. That makes it important that there should be one relatively simple descriptive document that is both up-to-date and widely available, so that ordinary people involved in the system will have the chance of understanding it. At the moment, I do not think that they do.
Yesterday evening I picked up from the Library its useful background paper on child benefit. It began by saying:
This paper attempts to summarise the changes there have been in the child benefit scheme".
I like that. In the ordinary course of events the House of Commons Library, whose staff are highly competent and do an extremely good job, would never have used the phrase "attempts to summarise". They would not usually say that they were attempting to summarise the changes but would say that they had summarised them. The matter is now so mind-boggling in its complexity that no one can be sure that he has got it all right.
In trying to summarise the changes and doing it very well—the Library staff have produced 14 pages of closely-typed

script with photocopies of 12 to 15 answers to Parliamentary Questions which have come out in dribs and drabs weekly and monthly, each one amending the previous reply or giving another little piece of information that must be read in conjunction with previous statements. This background paper is the only comprehensive document now available which describes the situation. It would take any hon. Member some time to digest all this and to form a full, coherent view of what is now proposed for the Child Benefit Scheme and associated changes.
The ordinary member of the public would need a full-time research assistant to learn what he is entitled to. That is ridiculous. It is difficult not only for the ordinary member of the public. I saw some old and close friends at the weekend. The wife is an Oxford graduate, the daughter of a former Labour MP. Her husband is a civil servant another Oxford graduate. Both are well paid. Their joint income is so high that they disclaimed the old family allowances, but they have found it impossible to discover either by themselves or through the post office in Highgate—the great home of Socialist intellectuals—

Mr. Patrick Jenkin: My hon. Friend have gravely insulted me and my neighbours. Highgate is a hotbed of Conservatism.

Mr. Newton: I apologise. I forgot that my right hon. Friend also lives in Highgate, and it is only a few roads away from him that the people about whom I am speaking live. They are, perhaps, more to the left than my right hon. Friend.
My friends have had the greatest difficulty in working out their entitlement. Perhaps the Minister will comment on this—although I do not pretend that my friends are in other than a minority group. Their income is high, and their tax position is such that it is best for them to have disclaimed family allowances, otherwise they would be worse off. That means that they have no family allowance book. This couple have three children and, therefore, they should have two books.
Hon. Members can imagine the difficulty of their going into the average post office—in all this confusion and without


the Post Office Staff having the foggiest notion of what is going on—and saying that one has three children but no family allowance books because one does not claim, and asking for child benefit. The post office clerk will then ask for the books in order that child benefit may be given. One will have to say again that one has no books.
I read to my friends, with amusement, some extracts from last week's debate on child benefits. They nearly had hysterics at some of the statements that were made by the Minister of State. They found the post office staff totally blank on this matter; they did not have a clue and were unable to give any sensible guidance. Post Office employees have been put in an impossible situation.
This is illustrative of the muddle and confusion that has arisen and of the need—this is a serious and desperate matter—for a coherent and relatively understandable piece of literary advice to be distributed throughout the country so that people who are being subjected to these difficult and complicated changes may have a chance of understanding what is happening.
I wish to reinforce what my hon. Friend the Member for Wallasey said about the complexities relating to school meals. My hon. Friend referred to a Written Answer in reply to the hon. Member for Sowerby (Mr. Madden), and I should like to read it to put on the record the sort of problem to which we are referring. The hon. Gentleman asked the Secretary of State for Education and Science to elucidate her statement of 28th January—in fact, it was a statement of the Minister for Social Security—with regard to
the treatment of child benefit for the purposes of calculating entitlement to free school meals; and, in particular, what will be the appropriate part of child benefit to be disregarded.
The Under-Secretary replied:
From April until the next revision of the remission scales, the amount of child benefit which will be disregarded in assessing eligibility for free school meals for families not in receipt of supplementary benefit or family income supplement will be the amount by which parental income exceeds the income which would have been received if child benefit had not been paid and family allowances or child interim benefit had been paid. My right hon. Friend the Secretary of State for Education

and Science and my right hon. and learned Friend the Secretary of State for Wales will shortly be laying before the House the necessary regulations to bring this into effect. My Department will be issuing guidance to local education authorities as soon as possible about the appropriate amounts to be disregarded, but I am not yet able to announce the details."—[Official Report, 4th March 1977; Vol. 927, cc. 328–329.]
That was a month before the scheme was due to come into effect. I have not checked it, but my hon. Friend the Member for Wallasey has told us that we have not yet seen the regulations. Presumably, no appropriate guidance has yet been issued to local authorities.
We are now less than a fortnight away from the date on which the scheme is due to come into effect and less than three or four weeks from the start of the next school term. Yet we have no regulations, no guidance to local authorities—virtually nothing about this important aspect of a scheme that is important to large numbers of the least-well-off people in our community.

Mr. Patrick Jenkin: Is my hon. Friend also aware that we have heard nothing from anyone about grants for students, which is astonishing since the new term will start quite soon?

The Minister for Social Security (Mr. Stanley Orme): Wait and see.

Mr. Patrick Jenkin: It starts in a fortnight.

Mr. Newton: I am grateful to my right hon. Friend. I had said all I wanted to say on school meals, and my next note reads simply "Students".
I do not wish to stray from the subject of the regulations, but the whole history of the Government's treatment of students and their parents in the past three or four months has been a scandal. Students and parents have been mucked about in the Social Security (Miscellaneous Provisions) Bill, which we completed earlier this evening, and they have been left in a vacuum over the changeover to the Child Benefit Scheme. According to answers from Treasury Ministers today, that vacuum shows no signs of being filled.
I understand that there is no question of the changes in relation to students' grants coming into effect before the start of the next academic year in September.


This will be to the disadvantage of parents, who will be losing part of their tax allowances when the Child Benefit Scheme starts in a fortnight's time. What about the five or six months in between? We are told that we must wait and see, but these are families that are often in great financial difficulty.
Some parents who are assessed for parental contributions often find that it is so hard to pay that they do not, and cannot, pay them at all. We are talking not about people who are rolling in money but about people who are under serious financial pressure, struggling to pay for part of their children's education. A fortnight before they are due to lose a substantial chunk of tax allowance and gain nothing in return, they have no knowledge of what is to happen or whether and how they are to receive compensation. If I went on too long on that subject I should be ruled out of order, but it is another aspect of the chaos and confusion that underlies the subject matter tonight.
Later I shall seek to annul Statutory Instrument No. 417 because, as much as anything else we have before us, it demonstrates the mess that we are in. We have a fat, 24-page document, the Social Security (Child Benefit (Consequential)) Amendment Regulations 1977, which was laid before the House on 11th March. That was before anyone had even had a chance to read the first regulations. The ink had not dried on the original before we had an amendment to it.

Mr. Deakins: We have heard that argument before.

Mr. Newton: That does not mean that it is not a valid argument. It illustrates the chaos and confusion into which the Department, Ministers and hon. Members have been put because of the handling of the matter. Of course things get left out of regulations, but that puts the tin lid on the confused way in which this social reform has been put into effect.

10.43 p.m.

Sir George Young: I pay tribute to my hon. Friend the Member for Wallasey (Mrs. Chalker) who, without the aid of a battery of civil servants, not only understood the regulations but saw what was wrong with them. When the Child Benefit Bill was going through the

House, I commented on how much would be left to regulations and how little was in the Bill. The mass of regulations in which we are now swimming shows that not enough attention was paid to such important subjects as the impact on dependants overseas and the impact on students. Now we have to pick up the pieces.
We pressed the Government for a statement on their strategy for family support so that we would know where we were going. We have never had that statement. I welcome the explanatory note that the Minister sent to hon. Members who were interested. It is a pity that I received it only today, because it is complicated.

Mr. Deakins: Bearing in mind what happened in Committee a couple of months ago, I checked to ensure that the explanatory memorandum was sent out on Tuesday night so that hon. Members would definitely have it in their postboxes by Wednesday.

Sir G. Young: I accept what the Minister says, but I did not receive mine until this morning. My colleagues may have received their's yesterday, but even that does not provide adequate time in which to absorb such a complicated document.
I can count with difficulty up to 278 and it takes some time to go through some of the tables at the back. The Minister said that hon. Members can use the tables as a ready reckoner, but does he believe that the majority of hon. Members will understand the tables sufficiently to enable them to interpret them on behalf of constituents? My view is that without a substantial amount of preparatory work and some background knowledge, the majority of Members of Parliament would not be able to make much use of the tables as ready reckoners in dealing with constituents in their surgeries.
I pick out Column 6 of Table 5, concerning reduction in child tax allowance. What comes out of that table is that those families in receipt of FIS are also in the tax bracket. That shows some illogicality in the two systems—that people benefiting from an increase in FIS of some 75p are having their child tax allowance reduced by 70p. The interaction between the tax system and the social security


system is failing us if one has a table showing, on the one hand, people on low incomes getting FIS and, on the other hand, being subjected to a tax burden at the same time.
The whole jargon of some of the tables, with "CHIB", "FAM", "FIS" and "clawback", shows just how complicated the whole subject is getting. If there was some light at the end of the tunnel, one would be prepared to go along with this flood of regulations. This evening we have not got more light; we have got more tunnel. Each time there is an uprating, each time there is a new benefit, each time the disregards are altered and each time there is a new tax allowance, it seems that we shall have to amend the interactions of a whole lot of interrelated benefits.
If the Minister could say that this was a step towards a logical and effective system of family support, one could go along with it. But he can give no such assurance. He cannot say that the next time something is uprated we shall not have to go through the same sort of exercise in trying to understand it as we are tonight.
The difficulty arises from the interaction of child benefit and FIS, child benefit being a non-means-tested benefit and FIS being means-tested. Opposition Members saw child benefit as the first step in a new system of family support which would replace FIS. We saw FIS as being redundant once we had moved to a tax credit system. However, it is clear from these regulations that there is no such intention on the part of the Government and that they see some permanent relationship between the two. It is the absence of a goal, that infinitely depresses me.
If one considers the amount of knowledge needed by someone at the bottom end of the income scale to understand the regulations and compares it with the amount of knowledge needed at the other end, one can appreciate that income tax, surtax, capital gains tax and so on are infinitely easier to understand than these benefits at the other end. People on higher incomes have the benefit of accountants and tax advisers to get through the complexities. Those on lower incomes must rely on Members of Parliament,

or on officers of the Department of Health and Social Security, who are very helpful indeed. On the other hand, what is worrying is the amount of time that must be spent by staff behind counters explaining the increasingly complex social security system to claimants when, with the constraints on manpower in the Department, they could be doing something else.
I should like to mention briefly something to which my hon. Friend the Member for Braintree (Mr Newton) referred. At present people are getting new tax codings. These show the removal of child tax allowance, to be replaced eventually by child benefit. However, those with children at university do not get the child benefit, and those whose children are leaving university or college this summer will not benefit from the grants that begin next year. Therefore, they will be permanently out of pocket for the six-month period that begins next April. As I understand it, they will receive no compensation. One or two people have telephoned me to find out what is going on. I shall have no hesitation in saying to them that the Secretary of State has told them to wait and see.
I find the regulations somewhat depressing. As a House, we seem to be going deeper and deeper into the swamp, with no objective in sight and no logical steps towards a fairer, logical and comprehensible system of family support. At some stage the Government must outline a coherent strategy of family support. Without such a strategy it will become apparent that the Government do not have the slightest idea where they are going each time we get further regulations.

10.50 p.m.

Mr. Peter Bottomley: I am grateful for the chance to address the House on the regulations. Some of the mutterings that have come from the Treasury Bench indicate what a joint consultative committee with the Liberals will be like. I am sorry that the Liberals are not present.

Mr. Orme: So am I.

Mr. Bottomley: We are dealing with regulations that will affect 28 million people if we include all the parents and children who come within their terms. It


is perhaps indicative of how politics have moved away from the interests of many of the people most of the time that the House is not exactly overcrowded although we are dealing with matters that figured in the election manifestos of all the major parties in the past two elections. It is most significant that those who are willing to be vociferous on behalf of people at work are not willing to become involved in the complications and ramifications of regulations that affect families at home.
Ministers will not be surprised when I say that I do not think that we shall get anywhere near a way out of the terribly complex position in which we find ourselves until we pay substantial tax credits for children. I am talking of something in the region of 10 per cent. of average net take-home pay for each child, or about £5 a week per child. I do not think that anyone will claim that a child can be brought up for less than about £5 a week. If we take account of family circumstances and the money that people earn at work, it is up to the community to have tax credits.
That will come as no surprise to the leading members of my party, who think that I am a bit way out, or to Labour Members, who think that the only sensible way of raising family income is by trade union negotiated payment at work. There are 40 million parents bringing up children, and they will not all get the right rewards through activists in the Labour movement.
I shall read part of Statutory Instrument No. 417. It is an example of the sort of thing that those not now in the Chamber have missed. I think that they should be brought up to date. Regulation 2 states:
Regulation 15 of the principal regulations (which makes consequential amendments to the Social Security (Attendance Allowance) (No. 2) Regulations 1975(d)) shall be amended in accordance with the following provisions of this regulation—
(a) in paragraph (2) before the words 'for Paragraph (2)' there shall be inserted the words '10A of the Family Allowances (Qualifications) Regulations 1969, as amended (certain persons exempt from United Kingdom income tax)' in sub-paragraph (f) of paragraph (1), there shall be substituted the words 9 of the Child Benefit (General) Regulations 1967(e), as amended(f) (persons exempt from tax) and';".

Paragraph (b) states:
(b) in paragraph (3) before the words 'for sub-paragraph (ii)' there shall be inserted the words 'the words from "so however that" to the end of paragraph (1)(a) shall be omitted and'; and after the word 'payable' in sub-paragraph (ii) as so substituted there shall be inserted the words 'in respect of the child'.
That makes a great deal of sense to those of us who have been following the whole saga, but it will not make much sense to others. Perhaps they will not have to face the regulations, because they will put in their claim and get the money.
That brings me to my reason for hoping to divide the House on the motion. The value of the child benefit in the documents sent out by the Department is worth 30p for the extra child. Where does 30p go when the average manual wage in 1976 was £60 a week—£50 after deductions? Many married women work, and if, despite the Equal Pay Act, they earn only half what their husbands earn, that means an after-tax family income of £75. Yet after six years of the highest inflation that this country has seen for many years we can offer only 30p extra for the extra child. If the family receives FIS, that means an extra 25p—75p in all.
That is why the Government are in even greater disgrace over this matter than we managed to put them in last night. That is why—as a symbol, but symbols count—I hope to divide the House against the consequential amendment regulations.

10.56 p.m.

Mr. Deakins: The hon. Member for Wallasey (Mrs. Chalker) mentioned specifically the effect of the poverty trap. I cannot altogether reassure her, but I can give some information in relation to FIS. The effects of the poverty trap for low income families and those on FIS can be very serious, but they are seldom felt because of the time lag between receipt of an earnings increase and the review of the benefit award and because of regular benefit upratings.
With FIS, an award continues for 52 weeks, regardless of any subsequent increase of income after the date of claim. Since it is uprated every 12 months, at some time in the currency of an award the prescribed amounts will have been uprated so that for the next award higher earnings are set against higher prescribed


amounts. Moreover, the high upratings in July 1975 and July 1976, coupled with the fact that the proposed July 1977 interim uprating is in line with the pay guidelines mean that no family can lose FIS and therefore the passport benefits which go with it solely because of an increase of pay within the guidelines.
Figures of the numbers of families theoretically subject to high marginal tax rates are calculated from the Family Expenditure Survey. The latest figures which the hon. Lady quoted for families which would have a marginal tax rate of 75 per cent. or over are 90,000 at December 1975, as compared with 60,000 at December 1974. Those figures are subject to considerable sampling error. I am not a statistician, but I am assured that, although the increase is 50 per cent., in terms of the 6 ½ million families in the survey it is not statistically significant.

Mrs. Chalker: I am aware that it is not statistically significant, but not only this figure but all the others which may be pointers, from slightly different bases than the Family Expenditure Survey, show a development of this trend. More and more families are becoming subject to high rates of marginal taxation as a result of the inability of tax thresholds and benefits to work co-operatively.

Mr. Deakins: I do not think anyone could possibly disagree with that analysis. Put in the context of the total number of working families with children being 6,500,000, about 1½ per cent. are theoretically subject to very high marginal tax rates. Actual figures are not known but the absence of authenticated cases suggests that in practice the numbers affected by a net loss of income are very small.
The hon. Lady made great play with tax credits. This is an argument that has gone back and forth across the Floor of the House on many occasions. Conservatives are very fond of talking about their tax credit scheme, and they seem to regard their 1972 scheme as a panacea for all ills—real and imaginary—affecting the entire tax and social security systems. Maybe they get a bit carried away when they talk about it—but that is certainly the impression they give. They tend to ignore the enormous cost of the scheme.

Mr. Patrick Jenkin: The hon. Gentleman cannot be allowed to get away with that. He must realise that the progressive reduction in real terms of tax threshholds means that that very few families are below it. Therefore, the cost of changing from tax allowance to cash benefit has been drastically reduced because there are so few families for whom the cash benefit represented an increase over tax allowance. To go on extrapolating figures from the 1972 Green Paper is absolute rubbish. I am astonished that this is in his brief.

Mr. Deakins: It is not in the brief.

Mr. Jenkin: Then I exonerate the hon. Gentleman's advisers. The condemnation must fall more heavily on him.

Mr. Deakins: I am grateful to the right hon. Member for putting forward Tory policies. To date there has been an absence of them. Certainly we did not hear any yesterday. I take it that the right hon. Gentleman's 1972 scheme will not now cost the £5 billion he originally thought it would, because he now talks of its being introduced in stages. That suggests that the Opposition are aware, albeit with the developments the right hon. Gentleman has mentioned, that it would still cost an enormous amount of money at a time when public expenditure is very much constrained. We have not had any concrete illustration of what the phasing in would mean. This is not the occasion to pursue that in detail, but I hope that on a future occasion we can have more light shed on what is involved.

Mr. Patrick Jenkin: The hon. Member's Department answered a Question from my hon. Friend the Member for Haltemprice (Mr. Wall) saying that it did not subscribe to the Conservative Monthly Newsletter as a means of keeping in touch with Opposition thinking. In that case, the Minister cannot stand up at the Dispatch Box and say that he knows nothing about it. I made a major speech a year ago in which I envisaged the phasing in of tax credits and that speech was reprinted in the Conservative Monthly Newsletter. Had his Department subscribed to it, the hon. Member would know all about our thinking on this matter.

Mr. Deakins: The hon. Lady asked specifically about one-parent families. I can give her more up-to-date information.


I have figures for December 1976. Basically, there were 77,000 families receiving FIS; 35,000 were one-parent families, of which 34,000 were headed by females and 1,000 were headed by males. An interesting figure relates to the percentage of one-parent families receiving FIS as a percentage of all families. Whereas in 1974 and 1975 the figures were 54 and 53 per cent. respectively, in 1976 the figure totalled 45 per cent.
The hon. Lady also asked about the maximum amount. I can give no undertaking, but it is one factor that needs to be reviewed in November when we examine the broad uprating of FIS.
Let me turn to the hon. Lady's questions about the regulations made by the Department of Education and Science. The hon. Lady was temporarily absent from the Chamber during the remarks of the hon. Member for Braintree (Mr Newton), but he quoted an answer which gave her the information she requires. The Secretary of State for Education and Science will be introducing regulations shortly providing that in such cases net increases in income will be disregarded for the purposes of the scheme. A parliamentary Question was tabled on this matter on 4th March by my hon. Friend the Member for Sowerby (Mr. Madden) asking my right hon. Friend to elucidate the statement of 28th January with regard to the treatment of child benefit for the purpose of calculating entitlement to free school meals. The answer is on the record on that date at column 328 of Hansard and I shall not quote it. I cannot add anything to what was said by the Government on that occasion.

Mr. Newton: My hon. Friend the Member for Wallasey (Mrs Chalker) and I were quoting the same answer. We were making the same point. All the answer said was that regulations would be introduced and guidance given. When shall we see those regulations and the guidance?

Mr. Deakins: The Secretary of State for Education and Science said that that would happen shortly, and I cannot go beyond that.
Let me turn to the position, with which the hon. Lady made some play, involving the payment of allowances in respect of

children abroad and the phasing out of child tax allowances in that context. Child benefit is not normally available in those cases.
I could go into great detail about the special provisions for people who are or have been abroad, but let me refer to one or two paragraphs. The establishment of child benefit as the criterion for entitlement to benefit or allowances in respect of dependent children would have the effect of severely limiting the periods and circumstances in which benefit or allowances could be paid in respect of children abroad. Special provisions therefore become necessary to preserve, but not enhance, the current position with regard to the payment of such benefits.
In general, child dependency benefit is not payable for a child who is abroad, other than temporarily. Special exception is made for those absent for medical treatment or education. However, under the EEC regulations on social security and the terms of certain reciprocal agreements a child dependant who is in the other country is treated, for the purposes of the claim to a child dependency benefit, as if he were in this country. That was sufficient to enable the conditions for child dependency benefit to be satisfied under the old criterion but it will in future be necessary to treat such persons as though they satisfy the new criterion for entitlement, that is, as if they satisfied the conditions for child benefit. I could go into a great deal more detail if I had time to do so, but I shall not.
The hon. Lady asked about claims outstanding. I have what I hope will be, if not good news, acceptable news. The number of claims from one-child families is 2,350,000. We are, so to speak, 450,000 claims short. I assure the hon. Lady that the awards can be backdated by one year. Therefore, the cases that come in within the next year are able to be backdated.
The hon. Member for Braintree asked a number of specific questions.

Mr. Patrick Jenkin: The Minister suggested that we would be aware of some reasons why some of those 450,000 might never make individual claims at all. I am not aware of any such reasons, but presumably the 2,300,000 include all those who would be entitled to claim.

Mr. Deakins: I am delighted to answer that question. Among the missing claimants there are several distinct categories. First, there are children about to leave school. There is a bigger shortfall among older children than among younger ones. We think that parents whose children are going to leave school at Whitsun, now the normal summer leaving date, may simply never bother to claim because they do not think it worthwhile. If they do not, they will not be out of pocket. The CTA for this year would probably be withdrawn in any case because of the child's earnings once it left school. Our estimate is that there could be 300,000 in this category.
Secondly, there are higher rate taxpayers. This group was affected by the change in plan from a taxable to a tax-free benefit, but the position was made plain in the Chief Secretary's statement of 16th November. The indications are that confusion still exists.

Sir G. Young: The Minister implied that the CTA would be withdrawn when the child left school, but is it not the case that the CTA is payable for the whole year?

Mr. Deakins: Yes, indeed, but it is a question of the tax year ending on 5th April. It depends on the child's earnings once the child starts work. I am not an expert on tax law but I am assured that that is the case.
I come back to the high rate taxpayers. As they begin to get their coding notice and consult their accountants they will no doubt sort themselves out, but they may well not do this until after April. They will lose nothing thereby. Child benefit can be paid for up to 52 weeks in arrears. There are 500,000 higher rate taxpayers with dependent children and perhaps one-third might be one-child families. But there will be others who have claimed FAM, so there could be a substantial number here as well.
I was asked about one-parent families. Present indications are that some one-parent families who have claimed the increase do not understand that they need to claim child benefit also. The numbers are expected to run into tens of thousands and not hundreds of thousands.
The hon. Member for Braintree gave examples of confusion at the Post Office. It is easy in such a complex scheme to

ask people for information and find that they refer to other sources that also seem not to have the information or be able to produce the proper form. I think that we hold the record among Government Departments for the number of leaflets produced. Of course, these leaflets often do not go into the sort of detail that we have been discussing this evening with regard to these detailed and complex regulations. That would be quite inappropriate either because people could not understand them or because of the cost of printing.
Nevertheless, once people are encouraged to claim, even if they are not sure about to what they are entitled, our local or central offices will sort out the position for each individual. When we have a scheme like this I do not think that we can expect very much more. The individual claimant may not be absolutely certain at the time of filling in the form about what he is entitled to, but it is up to the experts in the local, regional or national offices to get the position sorted out.
The hon. Member also mentioned students. I have already referred to the answer that he quoted. The hon. Gentleman specifically asked about the announcements with regard to student grants and child benefit allowances. These are expected shortly. I am sorry but I cannot add to that this evening. I know that there is only a short time to go, but the attention of my right hon. and hon. Friends in the Department of Education and Science will be drawn to the points made in this debate.
The hon. Member for Ealing, Acton (Sir G. Young) referred to FIS families who were paying tax. This is a well-known matter. We all agree that the interaction of social security and tax thresholds and low incomes catches people in a trap from which it is very difficult to escape. I cannot anticipate the Budget of my right hon. Friend the Chancellor, but I know that there is a widespread expectation that some things will be done to try to alleviate the situation. I do not know whether they will be done.
I do not think that there is any disagreement between the two sides of the House on the principle of moving to- wards a more easily understandable, simplified and unified system of family


support. We regard child benefit, as I hope the Opposition do, as a major social advance, whatever one may think about the way in which it has been introduced and the amount. It is a step towards a proper system of family support for all children in all families. For any Government the key question will be its priority compared with competing claims, in other areas as well as social security, where there are questions of pension increases, disablement benefit and so on. Obviously, more resources will need to be devoted to child benefit if it is effectively to take families out of the poverty trap and enable us eventually to get rid of the means-tested benefits we have been talking about.
I hope that I have dealt with the points that have been made. In the circumstances, in view of the very good and comprehensive debate that we have had, I ask the Opposition to be good enough to withdraw their Prayers.

Mrs. Chalker: With the leave of the House, may I say that I should be happy to withdraw the Prayers, but as I did not move them, I was not sure that I had to withdraw them?

Question put and agreed to.

Division No. 96]
AYES
[11.19 p.m.



NIL




TELLLERS FOR THE AYES:




Mr. Tony Newton and




Mr. Peter Bottomley.





NOES


Bean, R. E.
Graham, Ted
Snape, Peter


Bishop, E. S.
Harper, Joseph
Spearing, Nigel


Blenkinsop, Arthur
Hart, Rt Hon Judith
Stewart, Rt Hon Donald


Brown, Ronald (Hackney S)
Henderson, Douglas
Stewart, Rt Hon M. (Fulham)


Campbell, Ian
Hooley, Frank
Stoddart, David


Cocks, Rt Hon Michael
Jackson, Miss Margaret (Lincoln)
Taylor, Mrs Ann (Bolton W)


Cohen, Stanley
John, Brynmor
Tinn, James


Cox, Thomas (Tooting)
Lestor, Miss Joan (Eton &amp; Slough)
Urwin, T. W.


Cryer, Bob
Luard, Evan
Ward, Michael


Cunningham, G. (Islington S)
McDonald, Dr Oonagh
Wellbeloved, James


Davidson, Arthur
McElhone, Frank
Williams, Alan Lee (Hornch'ch)


Deakins, Eric
Maclennan, Robert
Wise, Mrs Audrey


Dormand, J. D.
Marks, Kenneth
Wrigglesworth, Ian


Dunwoody, Mrs Gwyneth
Maynard, Miss Joan



English, Michael
Mendelson, John
TELLERS FOR THE NOES:


Ewing, Harry (Stirling)
Orme, Rt Hon Stanley
Mr. Alf Bates and


Fowler, Gerald (The Wrekin)
Skinner, Dennis
Mr. A. W. Stallard.

Question accordingly negatived.

Resolved,
That the Family Income Supplement (Computation) Regulations 1977, a draft of which was laid before this House on 3rd March, be approved.

Mr. Deputy Speaker (Mr. Oscar Murton): May I ask whether the hon. Member for Wallasey (Mrs. Chalker) wishes formally to move the Prayers?

Mrs. Chalker: I shall remain in the position of neither having moved nor withdrawn the Prayers, Mr. Deputy Speaker.

Mr. Newton: Perhaps it would help it I indicated that even if my hon. Friend the Member for Wallasey (Mrs. Chalker) wished to withdraw the Prayers, I should resist her wish to withdraw the Prayer relating to Statutory Instrument 1977, No. 417, which I should like formally to move.

Motion made, and Question put:
That an humble Address be presented to Her Majesty, praying that the Social Security (Child Benefit Consequential) Amendment Regulations 1977 (S.I., 1977, No. 417), dated 7th March 1977, a copy of which was laid before this House on 11th March, be annulled.—[Mr. Newton.]

The House divided: Ayes 0, Noes 47.

STATUTORY INSTRUMENTS, &c.

Motion made, and Question put forthwith pursuant to Standing Order No. 73A (Standing Committee on Statutory Instruments, &amp;c.).

COUNTY COURTS (No. 2)

That the County Courts Jurisdiction Order 1977, a draft of which was laid before this

House on 10th March, be approved.—[Mr. Harper.]

Question agreed to.

ADJOURNMENT

Resolved, That this House do now adjourn—[Mr. Harper.]

Adjourned accordingly at twenty-nine minutes to Twelve o'clock.